Employment Agreement - FindWhat.com and Robert D. Brahms
FINDWHAT.COM
EXECUTIVE EMPLOYMENT AGREEMENT
THIS EXECUTIVE EMPLOYMENT AGREEMENT is made effective as of this 16th day
of March, 2001, (the "Agreement") between FindWhat.com ("FindWhat.com" or the
"Company"), a Nevada corporation, and Robert D. Brahms (the "Executive").
RECITALS
A. Executive is currently employed as an employee of FindWhat.com.
B. The parties desire to continue Executive's employment with FindWhat.com
and to appoint Executive to the position of Co-founder and Vice Chairman, on the
terms and conditions stated herein.
STATEMENT OF AGREEMENT
In consideration of the foregoing, and of Executive's continued employment,
the parties agree as follows:
1. EMPLOYMENT. The Company hereby employs Executive and Executive accepts
such employment upon the terms and conditions hereinafter set forth to become
effective on execution of this Agreement (the "Effective Time").
2. DUTIES.
-------
(a) Executive shall be employed: (i) to serve as Co-founder and Vice
Chairman of FindWhat.com, subject to the authority and direction of the
Board of Directors of FindWhat.com; (ii) to participate in certain business
development and strategic relationships, including maintaining and
expanding existing key relationships of the Company; (iii) to assist the
Chief Operating Officer in the day to day management of the New York office
and the New York office employees, including the right to review all
Company checks and wire transfers issued in the normal course of business;
(iv) to formulate ideas on all aspects of the Company's business and to
suggest such ideas to the Chief Executive Officer and to the Chief
Operating Officer; and (v) to manage the Company's relationship with
certain investors. Executive shall have such administrative support as is
reasonably necessary to carry out the duties set forth herein. As long as
Executive is employed hereunder, Executive shall also be a member of the
Executive Advisory Board.
(b) So long as employed under this Agreement, Executive agrees to
competently, diligently and effectively discharge all duties of Executive
hereunder. Executive shall not be prohibited from engaging in such
business, charitable, or other activities, including serving as an officer,
director or consultant to other businesses, which activities do not violate
<PAGE> 2
the other provisions of this Agreement and the Confidentiality,
Non-Competition and Assignment Agreement, of even date herewith, between
the Company and the Executive.
3. COMPENSATION. As full compensation for all services rendered to the
Company pursuant to this Agreement, in whatever capacity rendered, the
Company shall pay to Executive during the term hereof a minimum base salary
at the rate of $180,000 per year (the "Basic Salary"), payable bi-weekly or
in other more frequent installments, as determined by the Compensation
Committee of the Board of Directors. Prior to March 16, 2002, the Basic
Salary may be increased, but not decreased, from time to time, by the
Compensation Committee of the Board of Directors. Notwithstanding any
contrary provision in any Stock Option Agreement between the Company and
the Executive, if the Executive's employment with the Company is terminated
for any reason, such stock options shall vest and remain exercisable
throughout their term as if the Executive were still employed by the
Company.
4. BUSINESS EXPENSES. The Company shall promptly pay directly for
expenses relating to the use of a cellular telephone and Internet
connectivity for the Executive, in a manner consistent with practices in
place prior to the date of this Agreement. The Company shall reimburse
Executive, in the manner consistent with past practice, for actual travel
and entertainment expenses incurred in furtherance of this Agreement up to
$2,000.00 per month, which amount shall be increased to the extent such
expenses are incurred by Executive at the request of the Chief Executive
Officer or Chief Operating Officer.
5. BENEFITS. During the term of this Agreement and Executive's
employment hereunder, the Company shall provide to Executive such
insurance, vacation, sick leave and other like benefits as are provided to
other executive officers of the Company from time to time.
6. TERM; TERMINATION.
------------------
The Company shall employ the Executive, and the Executive accepts such
employment, for a term commencing on the date of this Agreement and ending
on March 16, 2002 (the "Term"). Unless notice of non-renewal is given by
either party prior to the end of the Term, this Agreement shall
automatically renew for an additional one year period at the expiration of
the Term. In the event the Company elects not to renew this Agreement as
provided above, the Company shall continue to pay Executive at the rate of
his Basic Salary for the six-month period following the end of the Term.
6.1. TERMINATION WITHOUT CAUSE; RESIGNATION FOR GOOD REASON.
-------------------------------------------------------
6.1.1. GENERAL. Subject to the provisions of subparagraphs 6.1.2
hereof, if, prior to the expiration of the Term, the Executive's
employment hereunder is terminated by the Company without Cause (as
defined in subparagraph 6.2.2 hereof), or if the Executive terminates
his employment hereunder for Good Reason (as defined in subparagraph
6.2.3 hereof), the Company shall continue to pay the Executive two
times his Basic Salary as then in effect for a period of one year from
the Date of Termination (as defined in Section 6.4. hereof) (such
period being referred to hereinafter as the "Severance Period"), at
such intervals as the same would have been paid had the Executive
remained in the active service of the Company. In
2
<PAGE> 3
addition, during the Severance Period, the Executive shall be entitled
to continue to participate in all employee benefit plans that the
Company provides (and continues to provide) generally to its senior
executives.
6.1.2. DEATH DURING SEVERANCE PERIOD. In the event of the
Executive's death during the Severance Period, payments of Basic
Salary under this paragraph 6 and payments under the Company's
employee benefit plan(s) shall continue to be made in accordance with
their terms during the remainder of the Severance Period to the
beneficiary designated in writing for such purpose by the Executive
or, if no such beneficiary is specifically designated, to the
Executive's estate.
6.2. TERMINATION FOR CAUSE; RESIGNATION WITHOUT GOOD REASON.
-------------------------------------------------------
6.2.1. GENERAL. If, prior to the expiration of the Term, the
Executive's employment is terminated by the Company for Good Cause, or
the Executive resigns his employment hereunder other than for Good
Reason, the Executive shall be entitled only to payment of his Base
Salary as then in effect through and including the Date of Termination
(as defined below) and accrued but unused vacation. The Executive
shall have no further right to receive any other compensation or
benefits after such termination or resignation of employment, except
as determined in accordance with the terms of the employee benefit
plans or programs of the Company applicable to the Executive. No
termination of the Executive's employment for Good Cause shall be
effective without the consent of the Board.
6.2.2. GOOD CAUSE. Termination for "Good Cause" shall mean
termination of the Executive's Employment because of:
(i) A commission of a material and substantive act of theft,
including, but not limited to, misappropriation of funds or any
property of the Company;
(ii) intentional engagement in activities or conduct clearly
injurious to the best interests or reputation of the Company
which in fact result in material and substantial injury to the
Company;
(iii) the willful and continued failure by the Executive to
perform his material obligations under this Agreement (other than
any such failure resulting from the Executive's incapacity due to
physical or mental illness) after demand for performance is
delivered by the Company to the Executive, in writing,
identifying the manner in which the Company believes the
Executive has not performed his duties and the Executive fails to
perform as required within thirty (30) days after such demand is
made;
(iv) gross insubordination by Executive, which shall consist
only of a willful refusal to comply with a lawful written
directive consistent with the terms of this Agreement to
Executive issued pursuant to a duly
3
<PAGE> 4
authorized resolution adopted by the Board of Directors of the
Company; or
(v) the final and unappealable conviction of the Executive
of a felony.
6.2.3. GOOD REASON. For purposes of this Agreement, "Good Reason"
shall mean any of the following (without the Executive's prior written
consent):
(i) a decrease in the Executive's Base Salary or a failure by the
Company to pay material compensation due and payable to the Executive
in connection with his employment, provided, however, the Company may
suspend payments to Executive of his Base Salary to the same extent
and in connection with the tolling of base salaries and all other
compensation of all other executive officers of the Company for
financial reasons as directed by a lawful resolution of the Board of
Directors of the Company. In the event of such suspension, Executive
shall receive shares of common stock of the Company equal to one times
the amount of such suspended Base Salary (in addition to and not in
lieu of such suspended salary, which shall be paid at the earliest
practical time) as of the date such salary was due and payable;
(ii) a diminution of the duties or title of the Executive
outlined in Section 2(a) hereof or the assignment to Executive of
duties inconsistent in any material respect with his position;
(iii) a change in the functions, responsibilities, authority or
term of the Company's Executive Advisory Board or Executive's removal
therefrom;
(iv) a breach by the Company of any material term or provision of
this Agreement; or
(v) other than in connection with a Change in Control (as defined
below) the removal of the Executive as a director of the Company or
the failure of the Executive to be re-elected as a director of the
Company. For purposes of this Agreement, a "Change in Control" shall
be deemed to occur (i) when any "person" as defined in Section 3(a)(9)
of the Securities and Exchange Act of 1934, as amended (the "Exchange
Act"), and as used in Section 13(d) and 14(d) thereof, including a
"group" as defined in Section 13(d) of the Exchange Act, but excluding
the Executive, the Company or any subsidiary or any affiliate of the
Company or any employee benefit plan sponsored or maintained by the
Company or any subsidiary of the Company (including any trustee of
such plan acting as trustee), becomes the "beneficial owner" (as
defined in Rule 13(d)(3) under the Exchange Act) of securities of the
Company representing 50% or more of the combined voting power of the
Company's then outstanding securities; or (ii) the occurrence of a
transaction requiring stockholder approval for the acquisition of the
Company by an entity other than the Company or a subsidiary or an
affiliated company of the Company through purchase of assets, or by
merger, or otherwise.
4
<PAGE> 5
6.3. NOTICE OF TERMINATION. Any termination of the Executive's
employment by the Company or by the Executive (other than termination by
reason of the Executive's death) shall be communicated by written Notice of
Termination to the other party of this Agreement. For purposes of this
Agreement, a "Notice of Termination" shall mean a notice which shall
indicate the specific termination provision in this Agreement relied upon
and shall set forth in reasonable detail the facts and circumstances
claimed to provide a basis for termination of the Executive's employment
under the provision so indicated.
6.4. DATE OF TERMINATION. The "Date of Termination" shall mean (a) if
the Executive's employment is terminated by his death, the date of his
death, (b) if the Executive's employment is terminated pursuant to Section
6.1 above, the date on which the Notice of Termination is given, (c) if the
Executive's employment is terminated pursuant to Section 6.2 above, the
date specified in the Notice of Termination after the expiration of any
applicable cure periods, and (d) if the Executive's employment is
terminated for any other reason, the date on which a Notice of Termination
is given after the expiration of any applicable cure periods.
6.5. Executive's employment shall terminate upon the death or
permanent disability of Executive. For purposes hereof, "permanent
disability," shall mean the inability of the Executive, as determined by
the Board of Directors of FindWhat.com, by reason of physical or mental
illness to perform the duties required of him under this Agreement for more
than 180 days in any one year period. Successive periods of disability,
illness or incapacity will be considered separate periods unless the later
period of disability, illness or incapacity is due to the same or related
cause and commences less than 180 days from the ending of the previous
period of disability. Upon a determination by the Board of Directors of
FindWhat.com that Executive's employment shall be terminated under this
Section 6(d), the Board of Directors shall give Executive 30 days' prior
written notice of the termination. If a determination of the Board of
Directors under this Section 6(d) is disputed by Executive, the parties
agree to abide by the decision of a panel of three physicians. FindWhat.com
will select a physician, Executive will select a physician and the
physicians selected by FindWhat.com and Executive will select a third
physician. Executive agrees to make himself available for and submit to
examinations by such physicians as may be directed by the Company. Failure
to submit to any examination shall constitute a breach of a material part
of this Agreement.
6.6. The Executive may terminate his employment for any reason upon
giving 30 days' advance written notice to the Company. If Executive's
employment is so terminated under this Section 6(e), the Company will pay
Executive the earned but unpaid portion of Executive's Basic Salary through
the Termination Date and any incentive compensation under and consistent
with plans adopted by the Company prior to the Termination Date.
7. PLACE OF PERFORMANCE.
---------------------
If the Company decides to move its New York office to another office
in Manhattan, Executive will not be required, but shall be entitled, to
maintain an office in such new location. If the Company decides to
terminate operations in Manhattan, Executive shall not be required to
relocate and, to the extent the Executive can't perform his duties
hereunder because there is no office in Manhattan, his non-performance will
not constitute "Good Cause"
5
<PAGE> 6
or "Good Reason".
8. INDEMNITY.
----------
(a) Subject only to the exclusions set forth in Section 8(b) hereof,
the Company hereby agrees to hold harmless and indemnify Executive against
any and all expenses (including attorneys' fees), judgments, fines and
amounts paid in settlement actually and reasonably incurred by Executive in
connection with any threatened, pending or completed action, suit or
proceeding, whether civil, criminal, administrative or investigative
(excluding an action by or in the right of the Company) to which Executive
is, was or at any time becomes a party, or is threatened to be made a
party, by reason of the fact that Executive is, was or at any time becomes
a director, officer, employee or agent of the Company, or is or was serving
or at any time serves at the request of the Company as a director, officer,
employee or agent of another corporation, partnership, joint venture, trust
or other enterprise. The Company further agrees to advance to Executive all
amounts to which he would be entitled under this subsection (a) subject
only to repayment by Executive if it is ultimately determined that he is
not entitled to indemnification pursuant to Section 8(b).
(b) No indemnity pursuant to Section 8(a) hereof shall be paid by the
Company:
(i) to the extent the aggregate losses to be indemnified
hereunder are actually paid pursuant to any directors and officers
liability insurance purchased and maintained by the Company;
(ii) on account of any suit in which judgment is rendered against
Executive for an accounting of profits made from the purchase or sale
by Executive of securities of the Company pursuant to the provisions
of Section 16(b) of the Securities Exchange Act of 1934 and amendments
thereto or similar provisions of any federal, state or local statutory
law;
(iii) if the indemnity is prohibited by Nevada law or the
Company's By-Laws.
(c) All agreements and obligations of the Company contained herein
shall continue during the period Executive is a director, officer, employee
or agent of the Company (or is or was serving at the request of the Company
as a director, officer, employee or agent of another corporation,
partnership, joint venture, trust or other enterprise) and shall continue
thereafter so long as Executive shall be subject to any possible claim or
threatened, pending or completed action, suit or proceeding, whether civil,
criminal or investigative, by reason of the fact that Executive was an
officer or director of the Company or serving in any other capacity
referred to herein.
(d) Promptly after receipt by Executive of notice of the commencement
of any action, suit or proceeding, Executive will, if a claim in respect
thereof is to be made against the
6
<PAGE> 7
Company under this Section 8, notify the Company of the commencement
thereof; but the omission so to notify the Company will not relieve it from
any liability which it may have to Executive otherwise than under this
Section 8. With respect to any such action, suit or proceeding as to which
Executive notifies the Company under this Section 8(d):
(i) The Company will be entitled to participate therein at its
own expense.
(ii) Except as otherwise provided below, to the extent that it
may wish, the Company jointly with any other indemnifying party
similarly notified will be entitled to assume the defense thereof,
with counsel selected by the Company and approved by the Executive,
which approval shall not be unreasonably withheld. After notice from
the Company to Executive of its election so to assume the defense
thereof, the Company will not be liable to Executive under this
Section 7 for any legal or other expenses subsequently incurred by
Executive in connection with the defense thereof other than reasonable
costs of investigation or as otherwise provided below. Executive shall
have the right to employ his counsel in such action, suit or
proceeding but the fees and expenses of such counsel incurred after
notice from the Company of its assumption of the defense thereof shall
be at the expense of Executive, unless (A) the employment of counsel
by Executive has been authorized by the Company, or (B) the Company
shall not in fact have employed counsel to assume the defense of such
action, in each of which cases the fees and expenses of counsel shall
be at the expense of the Company. The Company shall not be entitled to
assume the defense of any action, suit or proceeding brought by or on
behalf of the Company.
(iii) The Company shall not be liable to indemnify Executive
under this Agreement for any amounts paid in settlement of any action
or claim effected without its written consent. The Company shall not
settle in any manner which would impose any penalty or limitation on
Executive without Executive's written consent. Neither the Company nor
Executive will unreasonably withhold their consent to any proposed
settlement.
(e) Executive agrees that Executive will reimburse the Company for all
customary and reasonable expenses paid by the Company in defending any
civil or criminal action, suit or proceeding against Executive in the event
and only to the extent that it shall be ultimately determined that
Executive is not entitled to be indemnified by the Company for such
expenses under the provisions of Nevada law, federal securities laws, the
Company's By-laws or this Agreement.
9. PUBLIC OFFERING RIGHTS. In the event that the Company undertakes an
underwritten public offering of its own securities (a "Public Offering")
and any Officer or founding member of the Company participates in the
Public Offering as a selling shareholder (a "Selling Shareholder"), the
Company shall offer Executive the right to participate in the Public
Offering as a Selling Shareholder on the same terms and conditions as the
participating Selling Shareholders and to sell a number of shares of common
stock of the Company (as determined by
7
<PAGE> 8
Executive) up to the "Maximum Amount". The term "Maximum Amount" means the
number of shares of common stock of the Company owned by Executive
multiplied by the highest percentage of shares of common stock of the
Company owned by a Selling Shareholder (on an actual outstanding basis) as
to which any Selling Shareholder is permitted to sell in the Public
Offering. Executive's rights under this provision are in addition to any
other rights of Executive in this regard and shall survive termination of
this Agreement and Executive's termination of Employment for any reason.
Notwithstanding anything to the contrary above, Executive shall not have
any rights under this Section 9 if Executive owns less than 1% of the
Company's outstanding securities and such securities are not "restricted"
within the meaning of Rule 144 of the Securities Act of 1933, as amended.
10. ASSIGNMENT. This Agreement is personal to Executive and Executive
may not assign or delegate any of his rights or obligations hereunder.
Subject to the foregoing, this Agreement shall be binding upon and inure to
the benefit of the respective parties hereto, their heirs, executors,
administrators, successors and assigns.
11. WAIVER. The waiver by either party hereto of any breach or
violation of any provision of this Agreement by the other party shall not
operate as or be construed to be a waiver of any subsequent breach by such
waiving party.
12. NOTICES. Any and all notices required or permitted to be given
under this Agreement will be sufficient and deemed effective three (3) days
following deposit in the United States mail if furnished in writing and
sent by certified mail to Executive at:
6 Davis Lane
Roslyn, NY 11576
and to the Company at:
FindWhat.com
12751 Suite 3
Westlinks Drive
Fort Myers, FL 10001
Attention: Chief Executive Officer
with a copy to:
John B. Pisaris
Porter, Wright, Morris & Arthur LLP
41 South High Street
Columbus, OH 43215
13. GOVERNING LAW. This Agreement shall be interpreted, construed and
governed according to the laws of the State of New York. Any action brought
to enforce the terms of this Agreement must be brought in either the
Supreme Court of the State of New York,
8
<PAGE> 9
County of New York, or the United States District Court, Southern District
of New York.
14. AMENDMENT. This Agreement may be amended in any and every respect
only by agreement in writing executed by both parties hereto.
15. SECTION HEADINGS. Section headings contained in this Agreement are
for convenience only and shall not be considered in construing any
provision hereof.
16. ENTIRE AGREEMENT. With the exception of the Confidentiality,
Assignment and Noncompetition Agreement of even date herewith, and the
Executive's stock option agreements with the Company, this Agreement
terminates, cancels and supersedes all previous employment or other
agreements relating to the employment of Executive with the Company or any
predecessor, written or oral, and this Agreement contains the entire
understanding of the parties with respect to the subject matter of this
Agreement. This Agreement was fully reviewed and negotiated on behalf of
each party and shall not be construed against the interest of either party
as the drafter of this Agreement. EXECUTIVE ACKNOWLEDGES THAT, BEFORE
SIGNING THIS AGREEMENT, HE HAS READ THE ENTIRE AGREEMENT AND HAS THIS DAY
RECEIVED A COPY HEREOF.
17. SEVERABILITy. The invalidity or unenforceability of any one or
more provisions of this Agreement shall not affect the validity or
enforceability of any other provisions of this Agreement or parts thereof.
18. SURVIVAL. The last sentence of Section 3, and Sections 6, 8 and 9
of this Agreement and this Section 18 shall survive any termination or
expiration of this Agreement.
IN WITNESS WHEREOF, the parties hereto have executed this Agreement as
of the day and year first above written.
EXECUTIVE:
/s/ Robert D. Brahms
----------------------------------
Robert D. Brahms
FINDWHAT.COM
By: /s/ Phillip R. Thune
-----------------------------
Its: Chief Operating Officer &
Chief Financial Officer
----------------------------
9