Employment Agreement - Digital Insight Corp. and Bruce Isaacson
[Digital Insight Letterhead]
September 24, 2001
Bruce Isaacson
[Address]
Dear Bruce:
I am very pleased to offer you a position with Digital Insight Corporation (the
"Company") as its Senior Vice President, Product Management, Marketing and
Alliances. Your date of hire will be October 1, 2001. In this capacity you
will report to Dale Walker, President and Chief Operating Officer.
You will be classified as an exempt, full time employee and receive an annual
salary of $200,000, which will be paid in accordance with the Company's normal
pay procedures. Additionally, you will be eligible to participate in the
Company's executive management incentive Program with targeted cash bonus
compensation equal to 50% of your annual salary subject to the terms and
conditions of the Program. The amount of the bonus award is subject to the sole
discretion of the Company Board of Directors, based upon performance targets for
you and/or the Company. During 2001, your bonus will be guaranteed at twenty-
five thousand dollars ($25,000.00), to be paid in the first quarter of calendar
year 2002. You will receive annual reviews for pay increases commensurate with
other senior executives of the Company, with due consideration to your
performance, Company performance, and other factors.
Subject to Board approval, you will be granted a stock option to purchase
175,000 shares of Digital Insight Common Stock. The exercise price will be the
fair market value on your date of hire, which is equal to the Nasdaq closing
price of our stock on the previous trading day. You will also receive future
stock option grants commensurate with other senior executives of the company.
The shares underlying the option will vest over a 48-month period with 25%
vesting 12 months after your date of hire and 1/48th of the total grant vesting
monthly thereafter. The stock option is subject to the terms and conditions of
our stock option plan ("Option Plan") and will be documented separately by our
standard stock option agreement ("Option Agreement"). In the event of a "Change
in Control" of the Company, 50% of the remaining unvested shares underlying your
option and any future options granted by the Company as of that date will be
immediately vested. As used in this offer, a "Change in Control" shall mean any
of the following transactions to which the Company is a party:
(i) a merger or consolidation in which the Company is not the surviving
entity, except for (A) a transaction the principal purpose of which is
to change the state of the Company's incorporation, or (B) a
transaction in which the Company's stockholders immediately prior to
such merger or consolidation hold (by virtue of securities received in
exchange for their shares in the Company) securities of the surviving
entity representing more than fifty percent (50%) of the total voting
power of such entity immediately after such transaction;
(ii) the sale, transfer or other disposition of all or substantially all of
the assets of the Company unless the Company's stockholders
immediately prior to such sale, transfer or other disposition hold (by
virtue of securities received in exchange for their shares in the
Company) securities of the purchaser or other transferee representing
more than fifty percent (50%) of the total voting power of such entity
immediately after such transaction; or
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(iii) any reverse merger in which the Company is the surviving entity but
in which the Company's stockholders immediately prior to such merger
do not hold (by virtue of their shares in the Company held
immediately prior to such transaction) securities of the Company
representing more than fifty percent (50%) of the total voting power
of the Company immediately after such transaction.
You will be eligible to receive Company benefits enjoyed by all Digital Insight
employees and senior executives in accordance with the eligibility terms and
conditions of these programs. As an executive officer of the Company you will
exempt from the normal limits on paid time off that are defined in the Employee
Handbook, and the Company will not accrue paid time off for you. It is expected
that you will take paid time off as needed and at your discretion, subject only
to the approval of the President and Chief Operating Officer. Participation in
the Company's AXIS.ABLE Flex Benefits program will be effective the 1st of the
month following 30 days of employment. These programs will be reviewed with you
in detail during your new hire orientation.
As a condition of your employment with Digital Insight, you will be required to
sign an employee Nondisclosure Agreement which requires, among other provisions,
the assignment of patent and other intellectual property rights to any invention
made during your employment at the Company and non-disclosure of proprietary
information. You agree that, during the term of your employment with the
Company, you will not engage in any other employment, occupation, consulting or
other business activity directly related to the business in which the Company is
now involved or becomes involved during the term of your employment, nor will
you engage in any other activities that conflict with your obligations to the
Company. As an employee of the Company, you will also be expected to abide by
other Company rules, regulations and policies and acknowledge in writing that
you have read the Company's Employee Handbook (once it has been made available
to you). Employment is also conditioned upon satisfactory results on a
background investigation. The background investigation will include the
following checks: 5 years employment verification, criminal background,
department of motor vehicles driving record, education verification and a credit
report.
For purposes of federal immigration law, you will be required to provide proof
of eligibility to work in the United States. Such documentation must be provided
to us within three (3) business days of your date of hire, or our employment
relationship with you may be terminated. You shall be indemnified by the
Company against liability as an officer of the Company and any affiliate to the
maximum extent permitted by applicable law and Company by-laws. This
indemnification shall continue so long as you may be subject to such liability.
For clarification and the protection of both you and the Company, this letter
and the agreement relating to proprietary rights between you and the Company,
set forth the terms of your employment with the Company and represents the sole
agreement between you and Digital Insight. It constitutes and expresses the
entire agreement regarding your employment. Any previous promises,
representations or understanding relative to any terms and conditions are not to
be considered as part of this offer unless expressed here in writing. In the
event of any material inconsistency between the terms and provisions of this
letter and those of any currently existing Option Agreement, Option Plan, or
current written policy as documented in the Employee Handbook applicable to you,
your rights and/or the Company's obligations shall be established by the terms
and provisions of such letter, Option Agreement, Option Plan, or written policy,
which would be most beneficial to you. The Option Agreement, Option Plan, and
Employee Handbook constitute all material plans, policies, and practices of the
company. It is understood that employment is at the mutual consent of the
employee and the Company. Accordingly, either the employee or the Company can
terminate the employment relationship at will, at any time, with or without
cause or advance notice, and without further obligation except as defined in
this letter and other documents referenced in this letter.
If your employment with the Company is terminated without Cause after three
months but before twelve months of employment, the Company will provide salary
and benefits continuation for a period of nine (9) months following the
termination date, ending no earlier than the one year anniversary of your date
of hire. Also, immediately upon the termination date, the number of unvested
options that would have vested according to the vesting schedule reflected in
each respective option grant during the nine (9) month period following the
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termination date shall vest immediately. All vested options shall be
exercisable for a period of three (3) months after such termination.
For purposes of the foregoing provisions of this letter, the term "Cause" shall
mean: (i) the conviction of any felony or any crime involving moral turpitude or
dishonesty; (ii) participation in a fraud or act of dishonesty against the
Company which adversely affects the Company in a material way; (iii) willful
breach of the Company's rules, regulations and policies which adversely affects
the Company in a material and demonstrable way; (iv) intentionally causing
material damage to the Company's property or business; (v) conduct which
constitutes gross insubordination; or (vi) habitual gross neglect of duties;
provided that the action or conduct described in clauses (iii), (v) and (vi)
above will constitute "Cause" only if such action or conduct continues after the
Company has provided Employee with written notice thereof and a reasonable
opportunity (to be not less than 30 days nor more than 90 days) to cure the
same. For the above purposes, a termination by the Company without Cause
includes a termination of employment by you within 60 days following notice to
you of: (a) the assignment by the Company of any duties to you which are
inconsistent with, or reflecting a materially adverse change in, your position,
duties, responsibilities, reporting relationships, base salary, compensation, or
status with the Company, (b) any required relocation greater than 50 miles from
the Company's home office in Calabasas, or (c) any material breach of this
letter agreement by the Company.
This letter may not be modified or amended except by a written agreement, signed
either by (a) you and the President and Chief Operating Officer of the Company,
or (b) you and the Chief Executive Officer of the Company.
To accept this offer, please sign and date this letter in the space provided
below and return it to me.
As you know Digital Insight is a growing Company with a bright future. I am
delighted to extend this offer to you, and look forward to working with you at
Digital Insight.
Best regards, Acceptance:
/s/ Dawn M. Batey
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Dawn M. Batey /s/ Bruce Isaacson
Vice President Human Resources ------------------
Date: September 24, 2001
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