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Exhibit 10.16
[CYBERSOURCE LETTERHEAD]
18 March 1998
Xx. Xxxx Xxxxxx
0000 000xx Xxxxxx X.X.
Bellevue, WA 98807
Re: Employment with CyberSource Corporation
Dear Xxxx:
CyberSource Corporation (also known as "xxxxxxxx.xxx") (the "Company") is
pleased to offer you a position as Chief Executive Officer & President of the
Company and a position on its Board of Directors, on the terms set forth in
this letter agreement, effective upon your acceptance by execution of a
counterpart copy of this letter where indicated below.
1. Reporting Duties and Responsibilities. In this position you will report to
the Board of Directors of the Company. This offer is for a full time position,
located at the offices of the Company, except as travel to other locations may
be necessary to fulfill your responsibilities. Upon your acceptance of this
offer to become the Company's Chief Executive Officer & President, the Board of
Directors will elect you to fill a position on the Company's Board of
Directors, and while you remain the Chief Executive Officer & President of the
Company, the Board of Directors will continue to nominate you for a position on
the Board of Directors of the Company.
2. Salary; Bonus; Benefits and Vacation. Your initial base salary will be
$16,667 per month, (an annualized rate of $200,000), subject to adjustment in
good faith by the Company's Board of Directors, payable in accordance with the
Company's customary payroll practice as in effect from time to time. You will
also be eligible to earn an annual bonus in the amount of $50,000, payable
quarterly, based on the achievement of objectives which you and the Company's
Board of Directors will mutually determine in good faith. The objectives for
your first year will be determined promptly after your acceptance of this
letter, objectives for future years will be determined promptly after the
beginning of each fiscal year of the Company. As a special part of your bonus
plan, the Company will guarantee $25,000 of your first year bonus, payable in
four equal installments of $6,250 at the end of each of your first four
quarters of employment which shall be paid provided you are then employed by
the Company. You will also receive the highest standard benefits accorded the
Company's executives under the Company's employee benefits package, and will be
subject to the Company's vacation policy, as such package and policy are in
effect from time to time.
3. Stock Options. Effective within 7 days of your acceptance of the offer
contained in this letter, and subject to the Board of Directors approval, the
Company will grant you an option to purchase 1,000,000 shares of the Company's
Common Stock pursuant to the Company's stock option plan and standard stock
option agreement. All options will have an exercise price that will be equal to
the fair market value of the Company's Common Stock at the date of grant. The
options will become exercisable over a four-year exercise schedule with 25% of
the shares vesting at the end of your first twelve months of service, and with
an additional 2.083% vesting per month thereafter, at the close of each month
during which you remain employed with the Company. In the event that a change
of control (defined to mean the Company is sold or is a party to a merger with
another company resulting in the Company's shareholders immediately prior to
such transaction owning less than 50% of the successor company's voting capital
stock immediately following such transaction) occurs, or if you resign due to a
material reduction in your title or
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duties, or your principal office is moved by the Company to a location more
than 60 miles away from San Jose, California within 18 months of start date,
the vesting period of all options held by you will be accelerated by twelve
months. In the event that such a change of control or resignation as described
above occurs after 18 months of your start date, fifty percent of the unvested
options held by you will be immediately vested. The balance of the unvested
options held by you will continue to vest under the original vesting schedule.
4. Temporary Living/Commute Expenses. The Company will provide reimbursement
for temporary living expenses in the San Xxxx area for a period not to exceed
the earlier of 5 months or until such time that your family establishes a
primary residence in the Greater San Xxxx area, which we anticipate will take
place prior to August 31, 1998. In the interim, you will also be reimbursed for
commute/travel expenses incurred between Seattle and the Greater San Xxxx area.
5. Confidential Information. As an employee of the Company, you will have
access to certain Company confidential information and you may, during the
course of your employment, develop certain information or inventions which will
be the property of the Company. To protect the interest of the Company, you
will need to sign the Company's standard "Employee Inventions and
Confidentiality Agreement" as a condition of your employment. We wish to
impress upon you that we do not wish you to bring with you any confidential or
proprietary material of any former employer or to violate any other obligation
to your former employers, and you have advised us that in connection with your
employment by the Company you will not bring with you or otherwise use any such
confidential or proprietary material. You have also advised us that to your
knowledge your former employer, Xxxxxx.xxx, has no concrete plans to make a
broadscale entry into the electronic commerce of software. In the event that
your former employer, Xxxxxx.xxx institutes any action, suit or proceeding
claiming that your employment by the Company breaches the non-compete
provisions of your employment agreement with Xxxxxx.xxx, the Company will
indemnify and hold you harmless from and against all liabilities, judgments,
damages, expenses and costs (including reasonable legal fees and costs)
directly arising from such action, suit or proceeding.
6. Relocation Assistance. The Company will provide reimbursement for all
standard household moving expenses to include packing/unpacking as well as
shipment of standard household items from your current residence in Bellevue,
Washington to the Greater San Xxxx area. The Company will also provide a one
time cash relocation allowance of $50,000 to be paid upon the closing of sale
of your Bellevue home or the closing of purchase of your California home,
whichever occurs first. This relocation allowance is intended to cover
transaction costs associated with the sale of your Bellevue home as well as the
purchase of your California home to include such items as Realtor fees, loan
points, closing costs and other miscellaneous expenses.
7. Housing Allowance. Starting at the purchase/close of escrow of your
California residence, xxxxxxxx.xxx will provide a $3,000 per month allowance
for 18 months which will help to offset your increased costs associated with
the purchase of a California home provided you continue to be employed by the
Company.
8. Severance Payments/Acceleration Upon Termination. If the Board of
Directors terminate your employment with the Company for any reason other than
fraud or willful malfeasance (or similar wrongful acts) or willful and
continuing (after notice) neglect of duties, the Company will pay you as agreed
upon severance an amount equal to your then base salary for the lesser of
(i) twelve months; or (ii) the number of months before you obtain a position
with another firm. You agree that the payments set forth in this offer letter
constitute all payments that you shall be entitled to, and under any theory, in
the event of any termination of employment. In the event you are terminated
with or without cause at any time prior to your first year anniversary date,
125,000 shares of the Company's Common Stock will immediately vest. In the
event you are terminated with or without cause (except for the reasons set
forth in the first sentence of this paragraph) after
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Your 12 month anniversary date up until 18 months after start of employment,
the vesting period of all options held by you will be accelerated by six (6)
months.
9. At-Will Employment. While we look forward to a long term relationship,
should you decide to accept our offer, you will be an at-will employee of the
Company, which means the employment relationship can be terminated by either of
us for any reason at any time. Any statements or representations to the contrary
(and, indeed, any statements contradicting any provision in this letter) should
be regarded by you as ineffective. Further, your participation in any stock
option or benefit program is not to be regarded as assuring you of continuing
employment for any particular period of time.
10. Authorization to Work. Because of Federal regulations adopted in the
Immigration Reform and Control Act of 1986, you will need to present
documentation demonstrating that you have authorization to work in the United
States. If you have any questions about this requirement, which applies to U.S.
citizens and non-U.S. citizens alike, please contact our human resources
department.
11. Term of Offer. This offer will remain open until March 24, 1998. If you
decide to accept our offer, and I hope that you will, please sign the enclosed
copy of this letter in the space indicated and return it to me. Upon your
signature below, this will become our binding agreement with respect to the
subject matter of this letter, superseding in their entirety all other or prior
agreements by you with the Company as to the specific subjects of this letter,
you will be binding upon and inure to the benefit of our respective successors
and assigns, and your heirs, administrators and executors, will be governed by
California law, and may only be amended in a writing signed by you and the
Company.
12. Start Date. This offer is made with the understanding that you will be
available to start employment with xxxxxxxx.xxx on or before April 7, 1998.
Xxxx, we are excited and pleased to have you join the xxxxxxxx.xxx team. I am
confident that we will successfully capitalize on our enormous market
opportunity.
Sincerely,
/s/ XXXXXXX X. XxXXXXXXX
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Xxxxxxx X. XxXxxxxxx
President & CEO
Acknowledged, Accepted and Agreed Date: 3/23/98
/s/ XXXX XXXXXX
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Xxxx Xxxxxx
