June 16, 1998 Mr. Richard Kreysar 110 Tuscarry Way Danville, CA 94506 Dear Rick: On behalf of Accrue Software Inc., I am pleased to offer you the position of President and Chief Executive Officer, reporting to the Board of Directors. In addition to your role of CEO, you'll also be elected to serve as a Director. Your annual salary will be $200,000. In addition, you will receive the company's standard employee benefit package. You will also be eligible for an annual bonus equal to up to one half of your salary upon achievement of plan, with additional uncapped upside based on revenue achievement above plan. This bonus will be based on achievement of specific milestones. The milestones will be proposed by you by January of each year (or within 45 days of your start date in the first year), and will be negotiated and approved by the Board of Directors. In addition, Accrue is offering you an option to purchase Common Stock representing 8 1/4% of the fully diluted Accrue shares outstanding, post the current round of financing. The exercise price of the option will be equal to the fair market value of Accrue's Common Stock on the date the Board grants your stock option. Your option will commence vesting upon your start of employment and is contingent on continued employment. After the first year of employment, 1/4 of the shares will vest and thereafter, 1/36 of the remaining shares will vest each month. This grant, which is immediately exercisable, will be subject to a Repurchase Agreement, which lapses according to the vesting schedule. If you leave the Company, the terms and conditions of this repurchase are specified in the Company's Stock Option Agreement. Furthermore, Accrue will offer you a full-recourse note to facilitate your participation in such a stock purchase, with details to be defined in an amendment to our Stock Option Plan. Should Accrue undergo a change of control, your vesting in this option would be accelerated by one year. In addition, in the event of a change of control, should your employment and as a result of termination other than for cause, or as a result of 'constructive termination,' vesting would be accelerated by an additional year. Should your job be terminated involuntarily for any reason other than 'for cause,' your salary, benefits, and stock option vesting will continue for six months beyond the date of termination, or one year from your date of hire, whichever is later. When Accrue offers to sell preferred stock to other investors, you will be offered the opportunity to purchase that same series of stock, at the same price, to maintain your pro rata equity position (or less, at your discretion) in the Company. This offer of employment is contingent upon your completing, signing, and returning to us, this offer letter. You will also be asked to sign a Non-Disclosure Agreement and a Proprietary Information Agreement as part of your new hire orientation. For purposes of federal immigration law (Immigration Reform and Control Act of 1986) you are also required to provide documentary evidence of your eligibility for employment in the United States. Further, your employment with Accrue is 'at will' and may be terminated by either the employee or employer at any time, for any reason. Nothing in this offer is to be construed as a contract of employment for any specific length of time. Except for the Non-Disclosure Agreement and the Proprietary Information Agreement and any rights in employee benefits generally offered to employees of Accrue, this offer represents the entire agreement related to your employment with Accrue and supersedes all prior or contemporaneous oral or written communications and representations. Except for injunctive proceedings against unauthorized disclosure of confidential information, any and all claims or controversies between you and Accrue, including but not limited to any claim based in tort, contract or employment discrimination or any claim based on any federal or state regulation, shall be settled by arbitration in accordance with the then commercial arbitration rules of the American Arbitration Association. The location of the arbitration shall be San Jose, California. Rick, we are pleased to welcome you to Accrue Software, Inc. All of the team members that have met you, our investors, and especially myself, are excited about working with you. Please signify your acceptance of our offer by signing below and returning this letter to me, no later than Wednesday, June 17th. Sincerely, ACCRUE SOFTWARE, INC. /s/ JOHN FEIBER ----------------------------------- John Feiber, Mohr Davidow Venturas Acknowledged receipt and accepted offer: /s/ RICHARD KREYSAR Richard Kreysar ----------------------------------- ----------------------------------------- Name, Signature Name, Printed 6/17/98 ----------------------------------- Today's Date 6/22/98 ----------------------------------- Start Date
Employment Agreement - Accrue Software Inc. and Richard Kreysar
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