Document:

Unassociated Document

    

      ANSWERS
        CORPORATION

      INCENTIVE
        STOCK OPTION AGREEMENT

      FOR

      [  insert
        name of optionee here  ]

       

      Agreement

       

      1.  Grant
        of Option    Answers
        Corporation (the “Company”) hereby grants, as of __________ (“Date of Grant”),
        to _________________ (the
        “Optionee”) an option (the “Option”) to purchase up to ____________ shares of
        the Company’s Common Stock, $0.001 par value per share (the “Shares”), at an
        exercise price per share equal to $__________ (the “Exercise Price”). The Option
        shall be subject to the terms and conditions set forth herein. The Option
        was
        issued pursuant to the Company’s 2005 Incentive Compensation Plan (the “Plan”),
        which is incorporated herein for all purposes. The Option is an Incentive
        Stock
        Option, and not a Non-Qualified Stock Option. The Optionee hereby acknowledges
        receipt of a copy of the Plan and agrees to be bound by all of the terms
        and
        conditions hereof and thereof and all applicable laws and
        regulations.

       

      2.  Definitions    Unless
        otherwise provided herein, terms used herein that are defined in the Plan
        and
        not defined herein shall have the meanings attributed thereto in the Plan.
        [For
        purposes of this Agreement, the term “Cause” shall have the same meaning as set
        forth on Exhibit
        A
        attached
        hereto.]

       

      3.  Exercise
        Schedule       Except
        as
        otherwise provided in Sections 6 or 9 of this Agreement, or in the Plan,
        the
        Option is exercisable in installments as provided below, which shall be
        cumulative. To the extent that the Option has become exercisable with respect
        to
        a percentage of Shares as provided below, the Option may thereafter be exercised
        by the Optionee, in whole or in part, at any time or from time to time prior
        to
        the expiration of the Option as provided herein. The Options shall vest over
        a
        period of four years from the Date of Grant, as follows (each date indicated
        referred to as a “Vesting Date”): One fourth (25%) of the Option shall vest one
        year after the Grant Date with the remaining three-fourths of the Option
        to vest
        in equal monthly amounts over the following thirty-six month period (2.08333%
        per month); in all cases, provided that the Continuous Service of the Optionee
        continues through and on the applicable Vesting Date.

       

      Except
        as
        otherwise specifically provided herein, there shall be no proportionate or
        partial vesting in the periods prior to each Vesting Date, and all vesting
        shall
        occur only on the appropriate Vesting Date. Upon the termination of the
        Optionee’s Continuous Service with the Company and its Related Entities, any
        unvested portion of the Option shall terminate and be null and
        void.

       

      4.  Method
        of Exercise    The
        vested portion of this Option shall be exercisable in whole or in part in
        accordance with the exercise schedule set forth in Section 3 hereof by written
        notice which shall state the election to exercise the Option, the number
        of
        Shares in respect of which the Option is being exercised, and such other
        representations and agreements as to the holder’s investment intent with respect
        to such Shares as may be required by the Company pursuant to the provisions
        of
        the Plan. Such written notice shall be signed by the Optionee and shall be
        delivered in person or by certified mail to the Secretary of the Company.
        The
        written notice shall be accompanied by payment of the Exercise Price. This
        Option shall be deemed to be exercised after both (a) receipt by the Company
        of
        such written notice accompanied by the Exercise Price and (b) arrangements
        that
        are satisfactory to the Committee in its sole discretion have been made for
        Optionee’s payment to the Company of the amount, if any, that is necessary to be
        withheld in accordance with applicable Federal or state withholding
        requirements. No Shares will be issued pursuant to the Option unless and
        until
        such issuance and such exercise shall comply with all relevant provisions
        of
        applicable law, including the requirements of any stock exchange upon which
        the
        Shares then may be traded.

       

      
        
           

        

        
          
          

          
            

          

        

        
           

        

      

      5.  Method
        of Payment    Payment
        of the Exercise Price shall be by any of the following, or a combination
        thereof, at the election of the Optionee: (a) cash; (b) check; (c) with Shares
        that have been held by the Optionee for at least 6 months (or such other
        Shares
        as the Company determines will not cause the Company to recognize for financial
        accounting purposes a charge for compensation expense), (d) pursuant to a
        “cashless exercise” procedure, by delivery of a properly executed exercise
        notice together with such other documentation, and subject to such guidelines,
        as the Committee shall require to effect an exercise of the Option and delivery
        to the Company by a licensed broker acceptable to the Company of proceeds
        from
        the sale of Shares or a margin loan sufficient to pay the Exercise Price
        and any
        applicable income or employment taxes, (e) awards granted under other plans
        of
        the Company or a Related Entity, or other property (including notes or other
        contractual obligations of Participants to make payment on a deferred basis
        provided that such deferred payments are not in violation of the Sarbanes-Oxley
        Act of 2002, or any rule or regulation adopted thereunder or any other
        applicable law) or (f) such other consideration or in such other manner as
        may
        be determined by the Committee in its absolute discretion.

       

      6.  Termination
        of Option

       

      (a)  Any
        unexercised portion of the Option shall automatically and without notice
        terminate and become null and void at the time of the earliest to occur of
        the
        following:

       

      (i)  unless
        the Committee otherwise determines in writing in its sole discretion, three
        months after the date on which the Optionee’s Continuous Service with the
        Company and its Related Entities is terminated for any reason other than
        by
        reason of (A) termination of the Optionee’s Continuous Service by the Company or
        a Related Entity for Cause, (B) a Disability of the Optionee as determined
        by a
        medical doctor satisfactory to the Committee, or (C) the Optionee's
        death;

       

      (ii)  immediately
        upon the termination of the Optionee’s Continuous Service with the Company and
        its Related Entities for Cause;

       

      (iii)  twelve
        months after the date on which the Optionee’s Continuous Service with the
        Company and its Related Entities is terminated by reason of a Disability
        as
        determined by a medical doctor satisfactory to the Committee;

       

      (iv)  twelve
        months after the date of termination of the Optionee’s Continuous Service with
        the Company and its Related Entities by reason of the death of the Optionee
        (or,
        if later, three months after the date on which the Optionee shall die if
        such
        death shall occur during the one year period specified in paragraph (iii)
        of
        this Section 6);
        or

       

      
        
           

        

        
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      (v)  the
        sixth
        anniversary of the Date of Grant.

       

      (b)  In
        the
        event of any merger, consolidation or other reorganization in which the Company
        does not survive, or in the event of any Change in Control, any outstanding
        Option may be dealt with in accordance with any of the following approaches,
        as
        determined by the agreement effectuating the transaction or, if and to the
        extent not so determined, as determined by the Committee: (a) the continuation
        of the outstanding Option by the Company, if the Company is a surviving
        corporation, (b) the assumption or substitution for the outstanding Option
        by
        the surviving corporation or its parent or subsidiary, (c) full exercisability
        or vesting and accelerated expiration of the outstanding Option, or (d)
        settlement of the value of the outstanding Option in cash or cash equivalents
        or
        other property followed by cancellation of such Awards (which value, in the
        case
        of Options, shall be measured by the amount, if any, by which the Fair Market
        Value of a Share exceeds the exercise or grant price of the Option as of
        the
        effective date of the transaction). The Committee shall give written notice
        of
        any proposed transaction referred to in this Section a reasonable period
        of time
        prior to the closing date for such transaction (which notice may be given
        either
        before or after the approval of such transaction), in order that the Optionee
        may have a reasonable period of time prior to the closing date of such
        transaction within which to exercise any Option that are then exercisable
        (including any Options that may become exercisable upon the closing date
        of such
        transaction). The Optionee may condition his or her exercise of any Option
        upon
        the consummation of the transaction.

       

      7.  Transferability    Unless
        otherwise determined by the Committee, the Option granted hereby is not
        transferable otherwise than by will or under the applicable laws of descent
        and
        distribution, and during the lifetime of the Optionee the Option shall be
        exercisable only by the Optionee, or the Optionee’s guardian or legal
        representative. In addition, the Option shall not be assigned, negotiated,
        pledged or hypothecated in any way (whether by operation of law or otherwise),
        and the Option shall not be subject to execution, attachment or similar process.
        Upon any attempt to transfer, assign, negotiate, pledge or hypothecate the
        Option, or in the event of any levy upon the Option by reason of any execution,
        attachment or similar process contrary to the provisions hereof, the Option
        shall immediately become null and void. The terms of this Option shall be
        binding upon the executors, administrators, heirs, successors and assigns
        of the
        Optionee. 

       

      8.  No
        Rights of Stockholders    Neither
        the Optionee nor any personal representative (or beneficiary) shall be, or
        shall
        have any of the rights and privileges of, a stockholder of the Company with
        respect to any shares of Stock purchasable or issuable upon the exercise
        of the
        Option, in whole or in part, prior to the date of exercise of the
        Option.

       

      9.  Acceleration
        of Exercisability of Option

       

      (a)  This
        Option shall become immediately fully exercisable in the event that, prior
        to
        the termination of the Option pursuant to Section 6 hereof, and during the
        Optionee's Continuous Service, there is a “Change in Control”, as defined in
        Section 9 of the Plan.

       

      
        
           

        

        
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      (b)  Notwithstanding
        the foregoing, if in the event of a Change in Control the successor company
        assumes or substitutes for this Option, then each outstanding Option shall
        not
        be accelerated as described above. For the purposes of this Section 9(b),
        an
        Option shall be considered assumed or substituted for if following the Change
        in
        Control the award confers the right to purchase or receive, for each Share
        subject to the Option immediately prior to the Change in Control, the
        consideration (whether stock,
        cash or
        other securities or property) received in the transaction constituting a
        Change
        in Control by holders of Shares for each Share held on the effective date
        of
        such transaction (and if holders were offered a choice of consideration,
        the
        type of consideration chosen by the holders of a majority of the outstanding
        shares); provided, however, that if such consideration received in the
        transaction constituting a Change in Control is not solely common stock of
        the
        successor company or its parent or subsidiary, the Committee may, with the
        consent of the successor company or its parent or subsidiary, provide that
        the
        consideration to be received upon the exercise or vesting of an Option, for
        each
        Share subject thereto, will be solely common stock of the successor company
        or
        its parent or subsidiary substantially equal in fair market value to the
        per
        share consideration received by holders of Shares in the transaction
        constituting a Change in Control. The determination of such substantial equality
        of value of consideration shall be made by the Committee in its sole discretion
        and its determination shall be conclusive and binding.

       

      10.  Miscellaneous
        Provisions

       

      (a)  No
        Right to Continued Employment.
        Neither
        the Option nor this Agreement shall confer upon the Optionee any right to
        continued employment or service with the Company.

       

      (b)  Law
        Governing.
        This
        Agreement shall be governed in accordance with and governed by the internal
        laws
        of the State of Delaware.

       

      (c)  Incentive
        Stock Option Treatment.
        The
        terms of this Option shall be interpreted in a manner consistent with the
        intent
        of the Company and the Optionee that the Option qualify as an Incentive Stock
        Option under Section 422 of the Code. If any provision of the Plan or this
        Agreement shall be impermissible in order for the Option to qualify as an
        Incentive Stock Option, then the Option shall be construed and enforced as
        if
        such provision had never been included in the Plan or the Option. If and
        to the
        extent that the number of Options granted pursuant to this Agreement exceeds
        the
        limitations contained in Section 422 of the Code on the value of Shares with
        respect to which this Option may qualify as an Incentive Stock Option, this
        Option shall be a Non-Qualified Stock Option.

       

      (d)  Interpretation
        / Provisions of Plan Control.
        This
        Agreement is subject to all the terms, conditions and provisions of the Plan,
        including, without limitation, the amendment provisions thereof, and to such
        rules, regulations and interpretations relating to the Plan adopted by the
        Committee as may be in effect from time to time. If and to the extent that
        this
        Agreement conflicts or is inconsistent with the terms, conditions and provisions
        of the Plan, the Plan shall control, and this Agreement shall be deemed to
        be
        modified accordingly. The Optionee accepts the Option subject to all the
        terms
        and provisions of the Plan and this Agreement. The undersigned Optionee hereby
        accepts as binding, conclusive and final all decisions or interpretations
        of the
        Committee upon any questions arising under the Plan and this Agreement, unless
        shown to have been made in an arbitrary and capricious manner.

       

      
        
           

        

        
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      (e)  Notices.
        Any
        notice under this Agreement shall be in writing and shall be deemed to have
        been
        duly given when delivered personally or when deposited in the United States
        mail, registered, postage prepaid, and addressed, in the case of the Company,
        to
        the Company’s Secretary at 237 West 35th
        Street,
        Suite 1101, New York, NY 10001, or if the Company should move its principal
        office, to such principal office, and, in the case of the Optionee, to the
        Optionee’s last permanent address as shown on the Company’s records, subject to
        the right of either party to designate some other address at any time hereafter
        in a notice satisfying the requirements of this Section.

       

      (f)  Tax
        Consequences.
        Set
        forth below is a brief summary as of the date of this Option Agreement of
        some
        of the federal tax consequences of exercise of this Option and disposition
        of
        the Shares, that are applicable if and to the extent that the Option qualifies
        as an Incentive Stock Option. THIS SUMMARY IS NECESSARILY INCOMPLETE, AND
        THE
        TAX LAWS AND REGULATIONS ARE SUBJECT TO CHANGE. THE OPTIONEE SHOULD CONSULT
        A
        TAX ADVISER BEFORE EXERCISING THIS OPTION OR DISPOSING OF THE
        SHARES.

       

      (i)  The
        Optionee will not recognize any income as a result of the grant of the Option
        or
        his exercise of the Option. The amount by which the Fair Market Value of
        the
        Shares on the date of exercise exceeds the Exercise Price is, however, an
        item
        of adjustment for purposes of determining the Optionee’s alternative minimum
        tax, if any, for the year in which the Option is exercised. 

       

      (ii)  Upon
        the
        Optionee’s exercise of the Option, his tax basis in the Shares received will be
        equal to the Exercise Price paid.

       

      (iii)  Upon
        a
        sale of the Shares acquired upon exercise of the Option, provided the holding
        period requirements described below are met, the difference between the amount
        realized from the sale and the Exercise Price is treated as a long-term capital
        gain or loss.

       

      The
        foregoing rules differ, however, if the Optionee disposes of the Shares acquired
        pursuant to the exercise of the Incentive Stock Option prior to the later
        of (i)
        two years from the date the Option was granted, and (ii) one year from the
        date
        the Option was exercised. In the event of such a disposition (referred to
        as a
“disqualifying disposition”), the tax consequences relating to the Option would
        be as follows:

       

      (i)  The
        Optionee would not recognize any income as a result of the grant or exercise
        of
        the Option.

       

      (ii)  Upon
        the
        disqualifying disposition, the Optionee would recognize ordinary income equal
        to
        the lesser of (A) the amount by which the Fair Market Value of the Shares
        on the
        date of exercise exceeds the Exercise Price paid, and (B) the actual gain
        on the
        sale of the Shares. Under current law, the amount so recognized is not subject
        to federal tax withholding or employment taxes.

       

      
        
           

        

        
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      (iii)  The
        amount by which the amount realized from the sale of the Shares differs from
        the
        Fair Market Value of the Shares on the date of exercise would be taxable
        to the
        Optionee as a capital gain or loss.

       

      (iv)  The
        amount of the Optionee’s capital gain or loss would be long-term or short-term
        depending upon whether the Optionee held the Shares for more than one year
        from
        the date of his exercise of the Option.

       

      IN
        WITNESS WHEREOF, the undersigned have executed this Agreement as of the [
        ] day
        of [ ], [        ].

       

      
        	 	 	 
	 	
                COMPANY:

                 

                ANSWERS
                  CORPORATION

              
	 
 	 
 	 
 
	 	By:  	 
	 	
                
[                       
                ]
	 	 

      

       

      The
        Optionee acknowledges receipt of a copy of the Plan and represents that he
        or
        she has reviewed the provisions of the Plan and this Option Agreement in
        their
        entirety, is familiar with and understands their terms and provisions, and
        hereby accepts this Option subject to all of the terms and provisions of
        the
        Plan and the Option Agreement. The Optionee further represents that he or
        she
        has had an opportunity to obtain the advice of counsel prior to executing
        this
        Option Agreement.

       

       

      
        	Dated:  	 	 
	 	
                OPTIONEE:

              
	 
 	 
 	 
 
	 	By:  	 
	 	
                
[                       
                ]
	 

      

      

      
        
           

        

        
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      EXHIBIT
        A

       

      The
        following terms shall have the meanings indicated:

       

      1. “Cause”
        shall mean a felony conviction
        by a court of law (which guilty verdict is sustained on final appeal) in
        connection with and limited to his services to the Company, or pleading guilty
        to or no contest to a felony involving fraud, embezzlement, misappropriation
        of
        funds in connection with and limited to his services to the Company. Any
        termination for Cause shall be made in writing to the Optionee, which notice
        shall set forth in detail all acts or omissions upon which the Company is
        relying for such termination.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

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