Unassociated Document


    EMPLOYMENT
      AGREEMENT

     

    


     

    THIS
      EMPLOYMENT AGREEMENT
      (the
“Agreement”) entered into as of July 27, 2005, by and between GuruNet
      Corporation, with offices at 237 West 35th Street, New York, New York, 10001
      (the “Company”) and Bruce D. Smith (“Executive”), residing at 2654 Frances
      Street, Bellmore, New York 11710.

     

    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

    Building
      98

    Jerusalem
      Technology Park

    Jerusalem
      91481

    Israel

    Attention:
      Robert S. Rosenschein, CEO

     

     

    If
      to
      Executive, to:

     

    Bruce
      Smith

    _______________

    _______________

    


    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 
	 
 	 
 	 
 
	 	By:  	/s/ Robert
              S.
              Rosenschein
	 	
              
Name:
              Robert S. Rosenschein
	 	Title:
              Chief Executive Officer


      	 	 	
               

               

               

            
	 	Executive
	 
 	 
 	 
 
	 	By:  	/s/ Bruce
              D.
              Smith
	 	
              
Bruce
              Smith