This Employment
Agreement (the “Agreement”) is entered into as of
February 1, 2008, (the “Effective Date”) between
SalesGenie.com, Inc., a Delaware corporation (the
“Company”), and Mark Israelsen (the
“Employee”).
In consideration
of the promises and the terms and conditions set forth in this
Agreement, the parties agree as follows:
1.
Position . During the term of this Agreement, Company will
employ Employee, and Employee will serve Company in the position of
President of SalesGenie.com. In the event that there is a spinout
of SalesGenie.com such that it is no longer a subsidiary of
InfoUSA, Inc. (the “Parent”), then Employee will have
the title of President and Chief Executive Officer of
SalesGenie.com. Employee will initially report to Vin Gupta, the
Chief Executive Officer of the Parent. Employee hereby represents
and warrants to Company that Employee is free to enter into and
fully perform this Agreement and the agreements referred to herein
without breach or violation of any agreement or contract to which
Employee is a party or by which Employee is bound.
2.
Duties . The duties and services to be performed by Employee
under this Agreement are collectively referred to herein as the
“Services”. Employee agrees that to the best of his
ability and experience he shall at all times conscientiously
perform all of the duties and obligations assigned to him under the
terms of this Agreement. Employee will devote substantially all his
working time and efforts to the business and affairs of the
Company. At Company’s option, it will be entitled to
reasonable use of Employee’s name in promotional, advertising
and other materials used in the ordinary course of its business
without additional compensation unless prohibited by law.
Employee’s duties will include reasonable travel, including
but not limited to travel to offices of Company, its Parent,
subsidiaries and affiliates and current and prospective customers
as is reasonably necessary and appropriate to the performance of
Employee’s duties hereunder. Employee will comply with and be
bound by Company’s operating policies, procedures, and
practices from time to time in effect during Employee’s
employment.
3.
Compensation and Benefits .
3.1
Salary . Employee’s starting salary will be $400,000
per year. Employee’s salary shall be payable as earned at
Company’s customary payroll periods in accordance with
Company’s customary payroll practices. Employee’s
salary shall be subject to review and adjustment in accordance with
Company’ customary practices concerning salary review for
similarly situated executive employees of Company or its
subsidiaries.
3.2
Additional Benefits . Employee will be eligible to
participate in regular health insurance and other employee benefit
plans established by the Company or, in some cases, its Parent, for
the Company’s executive employees from time to time. The
Company will pay for Employee’s health insurance COBRA
premiums for the period from Employee’s commencement of
employment with the Company until the first date that Employee is
covered under the Company’s health insurance
plans.
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3.3
Annual Bonus . Employee will be eligible for an annual bonus
(commencing with calendar year 2008) that is equal to $400,000
multiplied by a percentage that is equal to two times the Annual
Growth Rate (as defined below). For purposes of this bonus,
“Annual Growth Rate” shall mean the percentage that is
determined by dividing the current year’s Imputed Revenue by
the prior year’s Imputed Revenue and subtracting one (1).
“Imputed Revenue” for a given year shall mean, the
revenue of the Company plus the profit of the Company (or less any
loss of the Company) during that year (each as computed in
accordance with generally accepted accounting principles under the
assumption that the Company’s Parent is paid royalties of
10%, 20% and 30% on advertising, subscription, and “per
name” revenue of the Company, respectively). For purposes of
the calculation in 2008, 2007’s Imputed Revenue shall be
equal to $45 million.
3.4
Additional Bonus . For so long as Employee remains employed
by the Company, at the end of each of the first twelve calendar
quarters of Employee’s employment, Employee will received an
additional bonus of $100,000 (until Employee has received a maximum
of $1,200,000 of such quarterly bonuses). The aggregate amount of
such bonuses actually paid (the “Additional Bonus
Amounts”) will be added to the exercise price of your option
grant described below (thereby also reducing the Company’s
purchase price in the event of any exercise of the Put Option or
Call Option described in Section 3.6 below).
3.5
Stock Option . As soon as reasonably practical following
commencement of Employee’s employment with the Company, the
Company and its Parent shall hire an independent third-party
appraiser to determine the current fair market value of the
Company’s Common Stock (assuming the grant of the option
described in this Section). Following such determination of fair
market value, Employee shall be granted under Company’s 2008
Equity Incentive Plan a stock option (the “Option”) to
purchase a number of shares of Common Stock that represents 5% of
the shares of the Company that will be outstanding or subject to
the Option following such grant. The exercise price of the Option
will be equal to the fair market value as determined by
Company’s Board on the date of grant in reliance on the third
party appraisal plus (on an aggregate basis) the Additional Bonus
Amounts. Such Option shall become exercisable and vest over four
years commencing on the first date of Employee’s employment
with the Company, with no portion of the Option becoming
exercisable or vesting unless and until Employee remains employed
by the Company on the third anniversary of commencement of
employment, at which time 75% of the shares subject to such Option
would become exercisable and vest (i.e. no longer be subject to
forfeiture due to termination of employment). The remaining 25% of
the shares subject to such Option will become exercisable and vest
if Employee remains employed by the Company on the fourth
anniversary of commencement of Employee’s employment. The
terms of such Option will provide that (i) in the event of a
Change of Control in which such Option is not assumed or
substituted by the acquiror or otherwise continued on substantially
similar terms (provided that in connection with such assumption or
substitution the option may become an option for other securities
issued in the transaction in exchange for shares of Common Stock of
the Company) (an “Option Terminating Change of
Control”), then all of the shares subject to such Option will
become vested and exercisable immediately prior to the consummation
of such a Change in Control and the Put Option and Call Option
described in Section 3.6 below will be in effect, and
(ii) that if at the time of any Involuntary Termination of
Employee’s employment, Section 3.6 below and the Put
Option and Call Option described therein have terminated because
the Parent is no longer a majority owner of the Company’s
outstanding capital stock, then such Option will provide for a
post-termination exercise period for up to the earlier of two
(2) years from termination or such
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time as a
public market or other liquidity exists for the Option’s
underlying shares. Such Option and the shares subject to such
Option will be subject to the Put Option and Call Option described
in Section 3.6 below.
3.6
Put/Call Option . As of the earliest of January 1,
2013, the date on which Employee’s employment is terminated
by the Company (unless prior to the third anniversary of
commencement of Employee’s employment such that the Option is
entirely unvested), and an Option Terminating Change of Control,
and in each case solely in the event that at such time the Company
remains a majority owned subsidiary of Parent and the
Company’s Common Stock is not publicly traded on an exchange,
then (i) the Company and its Parent shall promptly thereafter
hire, at the Company’s expense, an independent third-party
appraiser to determine the current fair market value of the
Company’s Common Stock as of such date, (ii) Employee will
have a put option to sell to the Company the Option and any shares
for which such Option has previously been exercised (the “Put
Option”), and (iii) the Company shall have a call option
to purchase from Employee the Option and any shares for which such
Option has previously been exercised (the “Call
Option”). The purchase price for either the Put Option or the
Call Option with respect to each previously exercised share under
the Option will be equal to the fair market value of a share of the
Company’s Common Stock as determined by the independent
third-party appraiser in accordance with clause (i) above and,
with respect to the unexercised portion of the Option, will be
equal to (a) the number of vested and unexercised shares then
subject to such Option, multiplied by (b) the fair market
value of a share of the Company’s Common Stock as determined
by the independent third-party appraiser in accordance with clause
(i) above less the then effective per share exercise price of
the Option. Either the Put Option or the Call Option may be
exercised by providing written notice to the Company or the
Employee, as the case may be, at any time during the three month
period following the determination of fair market value in
accordance with clause (i) above (which determination shall be
promptly communicated to the Employee upon completion). Following
any such exercise of the Put Option or Call Option, the Employee
agrees to take all actions reasonably necessary to effect the
transfer of the Option and any previously exercised shares to the
Company against delivery of the purchase price by the Company to
the Employee, each within ten (10) business days of the
written notice of such exercise. The provisions of this
Section 3.6 shall ter
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