Exhibit 10.11

 

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Lior Samuelson November 19, 2013

1304 Stamford Way

Reston, VA 20194

 

Dear Lior,

 

On behalf of Commtouch Inc. (the “Company”) and Commtouch Software Ltd, the
Israeli based parent to the Company (“CTLTD”, together with the Company,
“Commtouch”), I am pleased to offer you the position of Chief Executive Officer.
While your base of operations shall be in the United States and your formal
employment will be with the Company, you shall act as the Chief Executive
Officer of both CTLTD and the Company. You shall report to the Board of
Directors of CTLTD (“Board”). Additionally, you will remain the Chairman of the
Board of the Company and the Board shall nominate you for reelection as Chairman
of CTLTD at the next regularly scheduled annual shareholders’ meeting as well as
nominate you to hold the positions of both Chief Executive Officer and Chairman
of the Board.

 

Commencement Date:

 

Provided you accept the offer contained herein and provided the undersigned
Commtouch representative has signed a copy of this offer letter indicating
Commtouch’s agreement to the terms herein, your term as Chief Executive Officer
of Commtouch will commence as soon as the requisite number of votes of
shareholders approve, which shall be no later than the date of the next
regularly scheduled annual shareholders’ meeting currently scheduled for
December 23, 2013 (“Start Date”). You will be a full-time employee.

 

Base Compensation and Employment Status:

 

Your compensation package will include a base salary of $21,000 per month or
$252,000 on a yearly basis, based on a full-time schedule. Any subsequent year
base salaries shall be set in advance of the anniversary of the Start Date.

 

Salary will be paid in accordance with the Company’s standard payroll practices,
currently on a semi-monthly basis. Notwithstanding anything that may be
interpreted to the contrary herein, your employment shall remain at all times
“at will”, and you are classified as an exempt employee.

 

Chief Executive Officer Bonus for 2014

 

As Chief Executive Officer, you will be entitled to earn an annual MBO bonus of
$90,000; 85% based on performance and 15% discretionary.

 

i. Performance Bonus: If during the 2014 calendar year, the Commtouch
organization meets certain pre-defined (by the Compensation Committee) financial
performance metrics, as evidenced by the consolidated financial statements of
the CTLTD, pre-defined employee KPIs and the Compensation Committee’s
evaluation; all in accordance with and subject to the Executive Compensation
Policy applicable to corporate officers (a copy of which is attached to this
offer letter as Exhibit “A”), you shall earn an annual bonus 85% of $90,000 for
your service in 2014 calendar year as a senior corporate officer.

 

www.commtouch.com

7925 Jones Branch Drive, Suite 5200, McLean, VA 22102 ● tel: 703-760-3320 ● fax:
703-760-3321

 

 

 

 

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ii. Discretionary Bonus: Should the Compensation Committee determine that
sufficient progress has been made in the advance of general organization goals
during the 2014 calendar year, the Compensation Committee will authorize payment
to you of an additional bonus of up to 15% of $90,000 for your service in 2014
calendar year as a senior corporate officer.

 

In addition to the terms stated above, the earning of the aforementioned bonuses
is conditioned on your remaining in the role of Chief Executive Officer through
the date the bonuses are to be paid – subject to the provisions below under the
“Termination” section. Any bonuses earned by you for a given year in accordance
with the above shall be paid on April 1 of the following year.

 

For your first partial year of employment as Chief Executive Officer or if
subsequently the Company terminates your employment for any reason other than
Good Cause (as that term is defined below), you shall be entitled to a pro rata
amount of your annual MBO bonus earned upon the date of termination of your
employment as Chief Executive Officer. Should you voluntarily terminate your
employment as Chief Executive Officer prior to the end of one year, you shall
not be entitled to any MBO compensation for the year in which your termination
occurred.

 

A MBO bonus earned by you for a given year in accordance with the above shall be
paid following the end of a year in accordance with the Executive Compensation
Policy.

 

Option Grant:

 

We will recommend to the Board of Directors or a committee thereof that you
receive a grant of 360,000 options for purchase of Ordinary Shares in the
Company’s parent company, Commtouch Software Ltd., under terms of the Company’s
U.S. stock option plan and subject to the applicable option agreement. Your
grant, if approved, will vest over a four year period, with the first 25%
vesting twelve months following the grant date and thereafter in equal monthly
increments for thirty six months, assuming your continued employment. The Grant
Date will be the date that the Board of Directors or committee thereof approves
the grant and have an exercise price equal to the fair market value of an
Ordinary Share on the grant date.

 

Additionally, we will recommend that your option grant agreement include an
acceleration of vesting provision in the event of a the sale of all or
substantially all the assets of the Company; any merger, consolidation or
acquisition of the Company with, by or into another corporation, entity or
person; or any change in the ownership of more than fifty percent (50%) of the
voting capital stock of the Company in one or more related transactions (“Change
in Control”).

 

www.commtouch.com

7925 Jones Branch Drive, Suite 5200, McLean, VA 22102 ● tel: 703-760-3320 ● fax:
703-760-3321

 

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Employee Benefits/Vacation Accrual:

 

Provided that you timely complete all necessary applications/relevant documents,
once you become a full-time employee you will be eligible to participate in our
standard employee benefit plans, as they are currently defined and as modified
from time to time by the Company.

 

You will accrue vacation at a rate of four (4) weeks per year, in accordance
with Company policy, as set forth in the Employee Manual, subject to the
Company’s policies as to carrying over and cashing out vacation.

 

Place of Employment

 

Unless otherwise agreed in writing, you are required to work out of the
Company’s office in McLean, VA Monday through Friday of each week, subject to
the Company’s holiday schedule as published from time to time. Travel to other
locations may be necessary to fulfill your responsibilities, and you will be
visiting CTLTD and the Company’s offices in California, Germany and Iceland.

 

In addition to the Company’s travel policy, the company will pay for all housing
expenses, e.g., corporate housing, rent for local housing, related to time spent
visiting CTLTD up to a maximum for $25,000 per year.

 

Termination

 

You shall serve as an “at will” employee and, therefore, your employment
(including these terms) may be terminated at any time by either the Company or
you. Notwithstanding, both you and the Company agree to give each other 30 days’
advance written notice of termination. However, the Company may terminate your
employment for Good Cause without such advance notice. “Good Cause” shall mean
(i) an action by you involving a willful and wholly wrongful act; (ii) your
being convicted of, or pleading guilty to, a felony; (iii) an intentional,
material and substantial violation by you of a Company rule, regulation, policy
or procedure; or (iv) a substantial and material neglect of your duties.

 

i.Should the Company terminate your employment other than for Good Cause or
disability, you shall be entitled to a severance as follows:

 

a.A one-time payment equal to 6 multiplied by your current monthly base salary
at the time notice of termination was given, plus an amount equal to one half of
the annual allotment of vacation days.

 

b.Payment of your costs of securing continued medical, dental and vision
coverage through COBRA (or the relevant state equivalent, if applicable) for a
period of up to six months following termination (subject only to your electing
and remaining eligible for such coverage), unless providing such reimbursement
would be treated as discriminatory under applicable tax or other law. The
Company will be billed directly for COBRA amounts.

 

www.commtouch.com

7925 Jones Branch Drive, Suite 5200, McLean, VA 22102 ● tel: 703-760-3320 ● fax:
703-760-3321

 

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c.The options that would have vested in the six months following termination
will be accelerated and deemed vested.

 

d.The bonuses provided for in this letter and later agreed upon, may be earned,
pursuant to the conditions stated above, and, if so earned, will be paid pro
rata for that part of the year that you worked

 

e.The option exercise period for all stock options that are vested at the date
of termination shall be extended to end on 180th calendar day following the date
of termination (but in no event later than the expiration date of the term of
such options as set forth in the option agreement(s)).

 

ii.Payment of your severance under paragraphs a. and b. above shall be made
within forty-five days following termination of your employment as Chief
Executive Officer, provided you sign a release with the terms set out in section
iii. below that is effective by the earlier of the 60th day after employment
ends or such date as the Company specifies in the release. Payments would then
be made after the release becomes effective. Payment of your severance under
paragraph d. shall be paid at the time indicated under the bonus section above.
The Company shall be entitled to withhold from the gross amount of the severance
payment any amount on behalf of taxes, etc., as required by law, and the net
amount paid to you shall be considered full and final payment of severance
hereunder by the Company. You also agree that the provisions of Exhibit C apply
to your compensation in accordance with its terms.

 

iii.Subject to the applicability of this Termination section and the Company
accordingly fully performing its obligations thereunder and as required by law,
you agree to waive the right to make any and all claims, actions or demands of
any kind against CTLTD or the Company, or any affiliates, subsidiaries,
assignees, successors, employees, officers or directors thereof relating to the
termination of your employment and your terms of employment, including any
alleged right to additional compensation (collective, “Claims”). In this regard,
you also waive, release and promise never to assert any such Claims, known or
unknown, suspected or unsuspected against CTLTD or the Company and/or their
affiliates, subsidiaries, assignees, successors, employees, directors or agents,
whether or not you are aware of the nature or extent of the Claims at the time
that the General Release becomes effective. You therefore waive your rights
under Section 1542 of the California Civil Code or the similar law of any other
State. Section 1542 states:

 

“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 General Release,
which, if known to him must have materially affected his settlement with the
Debtor.”

 

iv.Prior to your departure (whether voluntarily or involuntarily), you shall be
obligated to make all reasonable efforts to transfer your responsibility to your
successor or supervisor, by assisting and coordinating with such person and
helping familiarize him/her with the Company/CTLTD and your responsibilities.

 

www.commtouch.com

7925 Jones Branch Drive, Suite 5200, McLean, VA 22102 ● tel: 703-760-3320 ● fax:
703-760-3321

 

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Additional Terms

 

Any usage of a home office must receive the advance permission of the
Compensation Committee. You agree that any such usage is not at the request of
the Company, and you voluntarily waive any and all claims against the Company
arising out of or relating to the use of your home, or a portion thereof, as an
office on behalf of Commtouch, including claims relating to the sufficiency of
the space utilized in performing your duties for Commtouch. Furthermore, you
agree to fully indemnify and hold harmless Commtouch against any claims of any
kind pertaining to your home, including those relating to your possession,
upkeep, usage, ownership or rental of your home. The Company will provide for a
personal computer that can be used at your home office or in the Company
offices, and will reimburse you for telephonic communications charges directly
relating to Company business performed at your home office.

 

Any expenses incurred by you shall be reimbursed by the Company upon receipt of
an appropriate expense report. Appropriate expense reports shall be submitted by
you in a timely manner, in accordance with Company policy, namely within two
weeks of the incurrence of the expense. The failure to timely submit expense
reports may be deemed by the Company, in its sole discretion, as sufficient
cause to reject a request for reimbursement. Expense reimbursements are further
subject to the terms of Exhibit C hereto.

 

Should you agree to employment as described herein, the terms described in this
letter, as well as the policies and conditions set forth in the Company’s
Employee Manual and periodic Company written updates, shall constitute the terms
of your employment. This letter constitutes the entire and final expression of
the agreement of the parties with respect to the subject matter hereof and
supersedes all prior agreements, oral and written, between the parties hereto
with respect to the subject matter hereof. This letter may only be amended,
canceled or discharged or any obligations thereunder waived through a writing
signed by you and the Chair of the Compensation Committee or any executive
officer of the Company (other than you) duly authorized either by the Board or
the Compensation Committee. You are encouraged to review the Company’s Employee
Manual, a copy of which will be provided to you at the offices of the Company.

 

In signing this letter, you agree that the procedural and substantive laws of
Virginia, without regard to laws pertaining to conflicts of law, shall govern
your employment. Furthermore, any dispute arising hereunder, including both
statutory and non-statutory claims, initially shall be referred to mediation in
accordance with the Mediation Agreement attached hereto as Exhibit “B”.
Thereafter, if the parties are unable to resolve a dispute via mediation, the
parties may bring any action before the courts or other governmental bodies
having proper jurisdiction in the matter. TO THE EXTENT NOT PROHIBITED BY
APPLICABLE LAW THAT CANNOT BE WAIVED, THE COMPANY AND YOU HEREBY WAIVE, AND
COVENANT THAT THEY WILL NOT ASSERT (WHETHER AS PLAINTIFF, DEFENDANT OR
OTHERWISE), ANY RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT OR OTHER PROCEEDING
ARISING IN WHOLE OR IN PART UNDER OR IN CONNECTION WITH THIS LETTER, WHETHER NOW
EXISTING OR HEREAFTER ARISING, AND WHETHER SOUNDING IN CONTRACT, TORT OR
OTHERWISE, THE PARTIES AGREE THAT ANY PARTY MAY FILE A COPY OF THIS PARAGRAPH
WITH ANY COURT AS WRITTEN EVIDENCE OF THE KNOWING, VOLUNTARY AND BARGAINED-FOR
AGREEMENT AMONG THE PARTIES IRREVOCABLY TO WAIVE THEIR RIGHTS TO TRIAL BY JURY
IN ANY PROCEEDING WHATSOEVER BETWEEN THEM RELATING TO THIS AGREEMENT OR TO ANY
OF THE MATTERS CONTEMPLATED UNDER THIS LETTER, RELATING TO YOUR EMPLOYMENT.

 

www.commtouch.com

7925 Jones Branch Drive, Suite 5200, McLean, VA 22102 ● tel: 703-760-3320 ● fax:
703-760-3321

 

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All notices required or permitted under this letter must be in writing and will
be deemed effective upon personal delivery or three business days following
deposit in a United States Post Office, by certified mail, postage prepaid, or
one business day after it is sent for next-business day delivery via a reputable
nationwide overnight courier service in the case of notice to the Company at its
then principal headquarters, and in the case of notice to you to the current
address on file with the Company. Notice to the Company must include a separate
notice to the General Counsel of the Company. Either party may change the
address to which notices are to be delivered by giving notice of such change to
the other party in the manner set forth in this paragraph.

 

Please confirm your acceptance by signing and returning a copy of this letter
along with the attached Acceptance and Acknowledgment Form and Exhibit “B”. This
offer is contingent upon its acceptance by November 19, 2013. You will be
required to sign an appropriate NDA and inventions assignment concurrent with
the commencement of your employment.

 

Lior, we are excited about the possibility of having you become an employee and
begin your service in the Chief Executive Officer role and look forward to a
productive future together. If you have any questions, please do not hesitate to
call.

 

Sincerely,       /s/ Yair Bar-Touv   Name   Compensation Committee, Chair  

 

www.commtouch.com

7925 Jones Branch Drive, Suite 5200, McLean, VA 22102 ● tel: 703-760-3320 ● fax:
703-760-3321

 

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ACCEPTANCE AND ACKNOWLEDGEMENT

 

I have read, understand and accept the foregoing terms of employment.

 

I understand that this letter does not constitute a contract of employment for
any specific period of time but will create an “employment at will” relationship
where the relationship can be terminated by me or by the Company at any time for
any reason, with or without cause. This statement supersedes any contrary
representations, which may have been made to me.

 

I understand that this offer of employment is contingent upon my providing
verification of my eligibility to work in the United States per the Public Law,
the Immigration Reform and Control Act of 1986. I will also be expected to
complete and execute an Employee Invention Assignment and Confidentiality
Agreement, an employment application, and an agreement to comply with the
Company’s policies and guidelines as a condition of employment.

 

I understand that you do not wish me to utilize any confidential or proprietary
material of any former employer in performing my duties for the Company, or to
violate any obligation to my former employers, and I have not and will not do
so.

 

Acknowledged, Accepted and Agreed on November 19, 2013.

 

Lior Samuelson   Name       /s/ Lior Samuelson   Signature  

 

www.commtouch.com

7925 Jones Branch Drive, Suite 5200, McLean, VA 22102 ● tel: 703-760-3320 ● fax:
703-760-3321

 

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EXHIBIT “A”

EXECUTIVE COMPENSATION POLICY

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

www.commtouch.com

7925 Jones Branch Drive, Suite 5200, McLean, VA 22102 ● tel: 703-760-3320 ● fax:
703-760-3321

 

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EXHIBIT “B”

EFFECT OF SECTION 409A OF THE CODE

 

Six Month Delay. If and to the extent any portion of any payment, compensation
or other benefit provided to you in connection with your employment termination
is determined to constitute “nonqualified deferred compensation” within the
meaning of Section 409A and you are a specified employee as defined in Section
409A(a)(2)(B)(i) of the Internal Revenue Code of 1986 (“Section 409A”), as
determined by the Company in accordance with its procedures, by which
determination you hereby agree that you are bound, such portion of the payment,
compensation or other benefit shall not be paid before the earlier of (i) the
expiration of the six month period measured from the date of your “separation
from service” (as determined under Section 409A) or (ii) the tenth day following
the date of your death following such separation from service (the “New Payment
Date” ). The aggregate of any payments that otherwise would have been paid to
you during the period between the date of separation from service and the New
Payment Date shall be paid to you in a lump sum in the first payroll period
beginning after such New Payment Date, and any remaining payments will be paid
on their original schedule.

 

General 409A Principles. For purposes of the letter to which this Exhibit is
attached (the “letter”), a termination of employment or Separation from Service
will mean a “separation from service” as defined in Section 409A and the
regulations and other guidance issued thereunder. For purposes of the letter,
each amount to be paid or benefit to be provided will be construed as a separate
identified payment for purposes of Section 409A, and any payments that are due
within the “short term deferral period” as defined in Section 409A or paid in a
manner consistent with Treas. Reg. § 1.409A-1(b)(9)(iii) will not be treated as
deferred compensation unless applicable law requires otherwise. Neither the
Company nor you will have the right to accelerate or defer the delivery of any
such payments or benefits except to the extent specifically permitted or
required by Section 409A. The letter is intended to comply with the provisions
of Section 409A and letter shall, to the extent practicable, be construed in
accordance therewith. Terms defined in the letter or this Exhibit will have the
meanings given such terms under Section 409A if and to the extent required to
comply with Section 409A. In any event, the Company makes no representations or
warranty and will have no liability to you or any other person if any provisions
of or payments under the letter or this Exhibit are determined to constitute
deferred compensation subject to Code Section 409A but not to satisfy the
conditions of that section.

 

Expense Timing. Payments with respect to reimbursements of business expenses
will be made in the ordinary course in accordance with the Company’s procedures
(generally within ___ days after you have submitted appropriate documentation,
which you must do within two weeks after incurring the expenses) and, in any
case, on or before the last day of the calendar year following the calendar year
in which the relevant expense is incurred. The amount of expenses eligible for
reimbursement, or in-kind benefits provided, during a calendar year may not
affect the expenses eligible for reimbursement, or in-kind benefits to be
provided, in any other calendar year, and the right to reimbursement or in-kind
benefits is not subject to liquidation or exchange for another benefit.

 

www.commtouch.com

7925 Jones Branch Drive, Suite 5200, McLean, VA 22102 ● tel: 703-760-3320 ● fax:
703-760-3321

 

 

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