Employment Agreement - Digital Insight Corp. and Dale Walker
February 1, 2001
Dale Walker
22 West 66th Street #14
New York, NY 10023
Dear Dale:
I am very pleased to offer you a position with Digital Insight Corporation (the
"Company") as its President and Chief Operating Officer. Your date of hire will
be February 12, 2001. It is agreed that this date may be moved out subject to
your reasonable need to recuperate from shoulder surgery. In this capacity you
will report to John Dorman, Chairman and Chief Executive Officer, and over a
mutually agreed upon phase-in period, be responsible for the following direct
reports: Senior Vice President Operations, Senior Vice President Lending
Division, Senior Vice President Sales & Marketing and the Senior Vice President
Product Management & Engineering. It is the intent that you will be responsible
for all officers reporting to the CEO other than the Chief Financial Officer.
Additionally, your appointment to the Board of Directors of the Company was
approved today, February 1, 2001 and will become effective as of your date of
hire.
You will be classified as an exempt, full time employee and receive an annual
salary of $300,000, which will be paid in accordance with the Company's normal
pay procedures. Digital Insight will provide a non-recourse, interest-free loan
of $210,000, to assist you with relocation expenses. The loan will be issued
during the first payroll cycle after your start date and will be evidenced by a
promissory note similar to the one attached hereto. The principal amount of the
loan will be forgiven in equal annual amounts over a three (3) year period as
specified in the terms and conditions of the promissory note. Additionally, you
will be eligible to participate in the Company's executive management incentive
program with targeted bonus compensation equal to 50% of your annual salary.
The amount of the bonus award is subject to the sole discretion of the Company
Board of Directors, based upon performance targets for the Company.
In addition, the Company will reimburse you through its standard business
expense process for the direct cost of moving household goods, including the
cost of insuring those goods, which costs are estimated to be approximately
$25,000. In addition, the cost of temporary housing up to $10,000 per month for
three months and the reasonable cost of travel between Calabasas and New York
for you and your wife during the relocation process will be reimbursed through
the standard business expense process, subject to the approval of the CEO as
provided by that process. If the moving cost and the relocation process are
expected to exceed these estimates, you agree to notify the CEO.
Subject to Board approval, you will be granted a stock option to purchase
440,000 shares of Digital Insight Common Stock. The exercise price for the
grant will be equal to the Nasdaq closing price of our stock on March 2, 2001.
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 and will be documented separately by our standard stock
option agreement. In the event of a "Change in Control" of the Company, 50% of
the remaining unvested shares underlying your option 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
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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
(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. Notwithstanding
the foregoing, in the event the acceleration of the vesting of your
option upon a Change in Control would prevent an acquisition from
being treated as a "pooling-of-interests" for financial accounting
purposes by the surviving entity, and such treatment is a condition
to the acquisition, the foregoing benefits will be equitably adjusted
to the extent necessary to effectuate such pooling-of-interests
treatment.
You will be eligible to receive Company benefits enjoyed by all Digital Insight
employees 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 Chief Executive Officer. Participation in the Company's AXIS.ABLE Flex
Benefits program will be effective as of your date of hire. 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 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.
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.
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. 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
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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 up to nine (9) months from the
termination date, ending no earlier than the one year anniversary of your date
of hire. For purposes of the foregoing sentence, 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 way; (iv) causing intentional damage to the Company's
property or business; (v) conduct which constitutes gross insubordination; or
(vi) habitual 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 30 days
following the assignment of any duties to you which is inconsistent with, or
reflecting a materially adverse change in, your position, duties,
responsibilities or status with the Company.
This letter may not be modified or amended except by a written agreement, signed
by you and the Chairman and 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
/s/ Dale R. Walker
Dawn M. Batey -------------------------
Director of Human Resources
Date:
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PROMISSORY NOTE
$210,000 January 31, 2001
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FOR VALUE RECEIVED, the undersigned, Dale Walker (the "Maker"),
-------------------
whose address is 22 West 66th Street #14, New York, NY 10023, promises to pay to
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the order of DIGITAL INSIGHT CORPORATION, a Delaware corporation (the "Lender"
or "Company"), at its office at 26025 Mureau Road, Calabasas, California 91302
in lawful money of the United States, or at such other address as the holder
hereof may from time to time designate in writing, the principal amount of two
hundred-ten thousand Dollars ($210,000.00).
This Note is non-recourse, interest free and matures on January 1, 2004
(the "Maturity Date).
The entire unpaid principal shall become due and owing on the Maturity
Date. So long as Maker remains in Service of Lender on the dates set forth
below, the unpaid balance (the "Amounts Forgiven"), shall be forgiven by Lender
as follows:
Date Amounts Forgiven
---- ----------------
January 1, 2002 $70,000
January 1, 2003 $70,000
January 1, 2004 $70,000
For purposes of this Note, "Service" shall mean the performance of services
for the Company or any parent or subsidiary corporation of the Company by Maker
in the capacity of an employee or an independent consultant or advisor.
Prior to the Maturity Date, in the event Maker voluntarily terminates his
employment with Lender or is terminated for "Cause," the entire unpaid principal
balance due upon the date of such termination (after taking into account the
previous Amount(s) Forgiven) shall be immediately due and payable. In the event
there is a "Change in Control" or Maker is terminated without "Cause," the
entire unpaid principal shall be forgiven by Lender, and Maker shall have no
further obligation under this Note. For purposes of this Note, 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 Lender which adversely affects Lender in a material way; (iii) willful
breach of Lender's rules, regulations and policies which adversely affects
Lender in a material way; (iv) causing intentional damage to the Company's
property or business; (v) conduct which constitutes gross insubordination; or
(vi) habitual 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 Lender has provided Maker 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 of employment
by the Lender without Cause includes a termination of employment by Maker within
30 days following the assignment of any duties to Maker inconsistent with, or
reflecting a materially adverse change in, Maker's position, duties,
responsibilities or status with Lender.
For purposes of this Note, the term "Change in Control" shall mean any
of the following stockholder-approved transactions to which the Company is a
party:
(iv) 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;
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(v) 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
(vi) 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. Notwithstanding the foregoing, in the event the
acceleration of the vesting of your option upon a Change in Control would
prevent an acquisition from being treated as a "pooling-of-interests" for
financial accounting purposes by the surviving entity, and such treatment
is a condition to the acquisition, the foregoing benefits will be equitably
adjusted to the extent necessary to effectuate such pooling-of-interests
treatment.
IN WITNESS WHEREOF, the undersigned has caused this Note to be executed in
its name on the day and year first above written.
MAKER:
/s/ Dale R. Walker /s/ Kevin McDonnell
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Dale Walker Date Chief Financial Officer Date
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