Exhibit 10.1
EMPLOYMENT
AGREEMENT
This Employment Agreement (the
“Agreement”) is made and entered into effective as of
February 2, 2009 (the “Effective Date”), by and
between William J. Lansing (“Employee”) and InfoSpace,
Inc. (the “Company”).
In consideration of the mutual
covenants herein contained, the employment of Employee by the
Company, and other good and valuable consideration the receipt and
sufficiency of which are hereby acknowledged, the parties agree as
follows:
1. Certain Definitions
.
(a) “ Cause ”.
For purposes of this Agreement, “Cause” means
(i) any act of criminal or fraudulent misconduct, as
determined by the Company’s Board of Directors (the
“Board”), taken by Employee in connection with
Employee’s responsibilities as an employee of the Company
which is intended to result in Employee’s personal
enrichment; (ii) Employee’s conviction of, or plea of
nolo contendere to, a felony under applicable law; (iii) the
breach of a fiduciary duty owed by Employee to the Company or its
stockholders; or (iv) continued material violations by
Employee of Employee’s employment obligations to the Company
after Employee has been given adequate written notice of such
violations and he is given fifteen (15) days to cure the
violations that are the basis of such written notice. Anything
herein to the contrary notwithstanding, any termination for
“Cause” within the meaning of clauses (i),
(iii) or (iv) of this subsection must be determined by
two-thirds (2/3rd) vote of the Board, with Employee first
having been given specific written explanation of the basis for the
“Cause” determination and an opportunity to appear
before the Board prior to final Board action.
(b) “ Change of Control
”. For purposes of this Agreement, a “Change of
Control” is defined as the occurrence of any of the
following:
(i) Any “person” (as
such term is used in Sections 13(d) and 14(d) of the Securities
Exchange Act of 1934, as amended) is or becomes the
“beneficial owner” (as defined in Rule 13d-3 under said
Act), directly or indirectly, of securities of the Company
representing more than 50% of the total voting power represented by
the Company’s then outstanding voting securities;
(ii) Any merger or consolidation of
the Company with any other corporation that has been approved by
the stockholders of the Company, other than a merger or
consolidation which would result in the voting securities of the
Company outstanding immediately prior thereto continuing to
represent (either by remaining outstanding or by being converted
into voting securities of the surviving entity) more than 50% of
the total voting power represented by the voting securities of the
Company or such surviving entity outstanding immediately after such
merger or consolidation, or the stockholders of the Company approve
a plan of complete liquidation of the Company;
(iii) Any sale or disposition by the
Company, in one transaction or a series of related transactions, of
all or substantially all the Company’s assets; or
(iv) A change in the composition of
the Company’s Board occurring within a one (1) year
period, as a result of which fewer than a majority of the directors
are Incumbent Directors. An “Incumbent Director” is
defined as a director who either (A) is a director of the
Company as of the Effective Date, or (B) is elected, or
nominated for election, to the Board with the affirmative votes of
at least a majority of the Incumbent Directors at the time of such
election or nomination. For purposes of the preceding, individuals
who are elected pursuant to clause (B) also shall be
considered Incumbent Directors.
(c) “ Continuance
Period ”. For purposes of this Agreement,
“Continuance Period” will mean the period of time
beginning on the Termination Date and ending on the date on which
Employee is no longer receiving Base Salary payments pursuant to
Section 7.
(d) “ Disability
”. For purposes of this Agreement, “Disability”
means that Employee is unable to engage in any substantial gainful
activity by reason of any medically determinable physical or mental
impairment that can be expected to result in death or can be
expected to last for a continuous period of not less than twelve
(12) months. The determination of the existence of a
Disability shall be made by a medical doctor selected by Employee
and the Company. If the parties cannot agree on a medical doctor,
each party shall select a medical doctor and the two doctors shall
select a third who shall be the approved medical doctor for this
purpose.
(e) “ Good Reason
”. For purposes of this Agreement, “Good Reason”
means Employee’s termination of employment within ninety
(90) days following the expiration of any cure period (as
provided below) following the occurrence of any of the following
without Employee’s express prior written consent: (i) a
material reduction of Employee’s authority, duties or
responsibilities, whether occurring before or after a Change of
Control, including a reduction in Employee’s authority,
duties or responsibilities solely by virtue of the Company being
acquired and made part of a larger entity, whether as a subsidiary,
business unit or otherwise and Employee not assuming the role of
Chief Executive Officer of the resulting parent entity (as, for
example, when the Chief Executive Officer of the Company remains
the Chief Executive Officer of the Company following a Change of
Control where the Company becomes a wholly owned subsidiary of the
acquiror, but is not made the Chief Executive Officer of the
resulting successor or parent entity); (ii) a material
reduction by the Company of Employee’s Base Salary or Target
Bonus opportunity; (iii) the failure to elect or reelect
Employee to the positions of President and Chief Executive Officer
of the Company other than for Cause; (iv) the assignment to
Employee of duties which are materially inconsistent with his
duties or which materially impair Employee’s ability to
function as the President and Chief Executive Officer of the
Company; (v) a change in the reporting structure so that
Employee is required to report to a corporate officer or employee
instead of reporting directly to the Board; or (vi) any other
action or inaction that constitutes a material breach of the terms
of the Agreement by the Company.
Employee shall not resign for Good
Reason without first providing the Company with written notice
within ninety (90) days of the event that Employee believe
constitutes “Good Reason” specifically identifying the
acts or omissions constituting the grounds for Good Reason and a
reasonable cure period of not less than thirty (30) days
during which the event is not cured.
(f) “ In Connection with a
Change of Control ”. For purposes of this Agreement, a
termination of Employee’s employment with the Company is
“in Connection with
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a Change of Control” if
Employee’s employment is terminated within twelve
(12) months after a Change of Control.
(g) “ Release ”.
For purposes of this Agreement, “Release” is defined as
a release of claims in the form of Exhibit A
hereto.
(h) “ Section 409A
Limit ”. For purposes of this Agreement, “Section
409A Limit” means the lesser of two (2) times:
(i) Employee’s annualized compensation based upon the
annual rate of pay paid to Employee during Employee’s taxable
year preceding Employee’s taxable year of Employee’s
termination of employment as determined under, and with such
adjustments as are set forth in, Treasury Regulation
Section 1.409A-1(b)(9)(iii)(A)(1) and any Internal Revenue
Service guidance issued with respect thereto; or (ii) the
maximum amount that may be taken into account under a qualified
plan pursuant to Section 401(a)(17) of the Internal Revenue
Code of 1986, as amended (the “Code”) for the year in
which Employee’s employment is terminated.
2. Duties and Scope of
Employment .
(a) Positions and Duties . As
of the Effective Date, the Company shall employ Employee in the
position of Chief Executive Officer and President, working out of
the Company’s Bellevue, Washington offices. Employee shall be
responsible for the general management of the business and affairs
of the Company, shall report directly and solely to the Board, and
shall render such business and professional services in the
performance of Employee’s duties, consistent with
Employee’s position within the Company, as shall reasonably
be assigned to Employee at any time and from time to time by the
Board.
(b) Board Membership .
Employee will be appointed to serve as a member of the Board as of
the Effective Date. Thereafter, at each annual meeting of the
Company’s stockholders during the Term at which
Employee’s term as a member of the Board has otherwise
expired, the Company will nominate Employee to serve as a member of
the Board. Employee’s service as a member of the Board will
be subject to any required stockholder approval. Upon the
termination of Employee’s employment for any reason, unless
otherwise requested by the Board, Employee will be deemed to have
resigned from the Board (and all other positions held at the
Company and its affiliates) voluntarily, without any further
required action by Employee, as of the end of Employee’s
employment and Employee, at the Board’s request, will execute
any documents necessary to reflect his resignation.
3. Obligations . While
employed hereunder, Employee will perform his duties faithfully and
to the best of Employee’s ability. Employee agrees not to
actively engage in any other employment, occupation or consulting
activity for any direct or indirect remuneration without the prior
approval of the Board; provided, however, that notwithstanding
anything to the contrary herein or in the Company’s standard
form of Supplementary Terms of Employment attached hereto as
Exhibit B, Employee may engage in the activities set forth in
Appendix A to such Exhibit B and may engage in other
non-competitive business or charitable activities so long as such
activities do not materially interfere with Employee’s
responsibilities to the Company.
4. At-Will Employment .
Subject to the terms and conditions hereof including without
limitation Section 7, the Company and the Employee acknowledge
that the Employee’s
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employment is and shall continue to be
terminable at-will, either party able to terminate the employment
relationship at any time with or without Cause.
5. Term of Agreement . This
Agreement will have an initial term of four (4) years
commencing on the Effective Date (the “Initial Term”).
On the fourth anniversary of the Effective Date, this Agreement
automatically will renew for an additional two (2) year term
(the “Additional Term”) unless either party provides
the other party with written notice of non-renewal at least ninety
(90) days prior to the date of automatic renewal. Following
the Additional Term, the Agreement automatically will renew for
additional one (1) year terms (the “Annual Additional
Term”) unless either party provides the other party with
written notice of non-renewal at least ninety (90) days prior
to the date of automatic renewal (the Initial Term, the Additional
Term, and the Annual Additional Term(s) referred to herein as the
“Term”).
6. Compensation and
Benefits.
(a) Base Compensation . The
Company shall pay Employee as compensation for Employee’s
services hereunder an annual base salary of $410,000 (such annual
salary, as is then effective, to be referred to herein as
“Base Salary”). Such salary shall be subject to
applicable tax withholding and shall be paid periodically in
accordance with normal Company payroll practices. The Base Salary
shall be subject to annual review by the Compensation Committee of
the Board (the “Committee”) but in no event shall be
less than $410,000 annually.
(b) Incentive Bonus . In
addition to the Base Salary, Employee may receive a performance
bonus during each year of the Term equal to an amount to be
determined by the Committee. The target amount of such annual
performance bonus shall not be less than 100% of Employee’s
then current Base Salary for the applicable fiscal year (the
“Target Bonus”). The actual earned performance bonus,
if any, for each fiscal year shall be based upon the achievement of
performance objectives to be mutually determined by Employee and
the Committee within each first fiscal quarter of the Company
during the Term and will be adjusted for under- or
over-performance. The amount of any bonus payable for any fiscal
year shall be paid to Employee in a single cash lump sum as soon as
practicable after the close of the fiscal year, but in any event by
no later than March 15 following the close of such fiscal
year.
(c) Benefits . Employee shall
be eligible to participate in the employee benefit plans and
perquisite plans and programs which are available or which become
available to other executive officers of the Company, with the
adoption or maintenance of such plans to be in the discretion of
the Company, subject in each case to the generally applicable terms
and conditions of the plan or program in question and to the
determination of any committee administering such plan or program.
Such benefits shall include participation in the Company’s
group medical, life, disability, and retirement plans, and any
supplemental plans on no less favorable terms than are available to
other executive officers of the Company from time to time. The
Company reserves the right to change or terminate its employee
benefit plans and programs at any time; provided that such change
or termination shall not adversely affect any vested or accrued and
entitled to benefits prior to such change or
termination.
(d) Expenses . The Company
will reimburse Employee for reasonable business expenses incurred
by Employee in the furtherance of or in connection with the
performance of Employee’s duties hereunder, in accordance
with the Company’s expense reimbursement policy as in effect
from time to time.
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(e) Stock Options; Restricted
Stock Units .
(i) As of the Effective Date,
Employee will be granted a non-qualified stock option (the
“Option”) to purchase 1,400,000 shares of the
Company’s common stock at an exercise price per share equal
to the closing price of the Company’s common stock on the
Nasdaq Global Select Market on the date of grant, or, if there is
no such reported price on the date of grant, the closing price on
the trading day on the Nasdaq Global Select Market first preceding
the date of grant on which there is a reported closing price.
Subject to the accelerated vesting provisions set forth herein, the
Option shall vest as to 25% of the shares subject thereto on the
first anniversary of the Option’s grant date and shall vest
ratably in six (6) month increments (12.5% each six
(6) month period) thereafter over the three (3) year
period commencing on the first anniversary of the Option’s
grant date, subject to Employee’s continued full-time
employment by the Company on the relevant vesting dates. The Option
shall be subject to the terms and conditions of the Company’s
Restated 1996 Flexible Stock Incentive Plan (the “1996
Plan”) and the stock option agreement between Employee and
the Company set forth as Exhibit C hereto; provided,
however, that notwithstanding the foregoing, in the event of a
conflict between the terms and conditions of the 1996 Plan or such
agreement and this Agreement, the terms and conditions of this
Agreement shall prevail unless the conflicting provision(s) in the
1996 Plan or such agreement, as the case may be, shall be more
favorable to Employee in which case the provision(s) more favorable
to Employee shall govern.
(ii) As of the Effective Date,
Employee will be granted 200,000 restricted stock units covering
the Company’s common stock (the “RSU Grant”). The
RSU Grant shall be subject to the terms and conditions of the 1996
Plan and the restricted stock unit agreement between Employee and
the Company set forth as Exhibit D hereto; provided,
however, that notwithstanding the foregoing, in the event of a
conflict between the terms and conditions of the 1996 Plan or such
agreement and this Agreement, the terms and conditions of this
Agreement shall prevail unless the conflicting provision(s) in the
1996 Plan or such agreement, as the case may be, shall be more
favorable to Employee in which case the provision(s) more favorable
to Employee shall govern. Subject to the accelerated vesting
provisions set forth herein, the RSU Grant shall vest as to 25% of
the restricted stock units subject thereto on the first anniversary
of the RSU Grant’s grant date and shall vest ratably in six
(6) month increments (12.5% each six (6) month period)
thereafter over the three (3) year period commencing on the
first anniversary of the RSU Grant’s grant date, subject to
Employee’s continued full-time employment by the Company on
the relevant vesting dates.
(iii) Notwithstanding anything to
the contrary contained herein, in the 1996 Plan or any applicable
stock option, restricted stock unit or other award agreement, all
of Employee’s Company stock options (together with other
rights to purchase or receive Company common stock, and including
without limitation, the Options) and restricted stock (including
restricted stock units and similar awards, and including without
limitation, the RSU Grant) (collectively the “Equity
Awards”) shall become vested and, as applicable, exercisable
immediately prior to the effective date of a Change of Control if
the acquiring or successor entity in such Change of Control has not
agreed, as part of such Change in Control transaction, to assume
such Equity Awards and/or substitute such Equity Awards with
substantially equivalent (in terms of value and terms and
conditions) awards denominated in the acquiring or successor
entity’s shares of common stock. If the acquiring or
successor entity in such a Change of Control agrees to assume such
Equity Awards then all such assumed awards will continue to be
“Equity Awards” hereunder and will remain subject to
the terms of this Agreement, the 1996
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Plan and the applicable forms of
award agreements. If the acquiring or successor entity in such a
Change of Control substitutes such Equity Awards with substantially
similar awards then such assumed awards will continue be
“Equity Awards” hereunder and be subject to the terms
of this Agreement, the substituted award agreement and the
applicable successor entity equity plan document under which such
awards have been substituted.
(iv) In the event that, from time to
time, the Board declares any extraordinary or special cash dividend
to the Company’s shareholders, the Committee will, within
thirty (30) days of such declaration, grant Employee an award
(that may be denominated in cash, shares of Company common stock,
stock options and/or restricted stock units) in an amount necessary
to make Employee whole for the loss in value of Employee’s
Equity Awards given the extraordinary or special cash dividend (the
“Make-Whole Award”). The decision with respect to the
form (cash, shares, options and/or restricted stock units) of any
such Make-Whole Award will be determined in the sole and absolute
discretion of the Committee.
(f) Sign-on Bonus . Within
thirty (30) days of the Effective Date, the Company will pay
Employee a one-time lump-sum cash signing bonus equal to $175,000,
subject to applicable tax withholding (the “Signing
Bonus”). If, within one (1) year of the Effective Date,
either (i) the Company terminates Employee for Cause, or
(ii) Employee voluntarily terminates his employment (and such
resignation is not for Good Reason), then Employee will return to
the Company an amount equal to any Signing Bonus received by
Employee as of the date of Employee’s termination multiplied
by a fraction with the numerator equal to 365 less the number of
days between the Effective Date and the Termination Date and a
denominator equal to 365.
7. Termination of Employment
.
(a) Termination by Company;
Voluntary Termination . In the event Employee’s
employment with the Company is terminated by the Company for any
reason (including for Cause) or voluntarily by Employee (including
for Good Reason) (i) the Company shall pay Employee any unpaid
Base Salary due for periods prior to the date of termination of
employment (“Termination Date”); (ii) the Company
shall pay Employee all of Employee’s accrued and unused
“paid time off” (“PTO”), if any, through
the Termination Date; (iii) following submission of proper
expense reports by Employee, the Company shall reimburse Employee
for all expenses reasonably and necessarily incurred by Employee in
connection with the business of the Company through the Termination
Date; (iv) the Company shall pay or provide Employee with all
vested or accrued and entitled to benefits under all employee
benefit and other plans and programs in which Employee
participates, all in accordance with the terms and conditions of
such plans or programs; (v) any earned, but unpaid and accrued
incentive compensation, including any earned, but unpaid and
accrued bonus pursuant to Section 6(b) above. These
paymen
