Employment Agreement - Interwoven Inc. and Jeffrey E. Engelmann
[INTERWOVEN LETTERHEAD]
December 11, 1998
Jeffrey E. Engelmann
[Address]
Re: Offer Letter
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Dear Jeff:
Interwoven, Inc. (the "Company" or "Interwoven") is pleased to offer you a
position as Vice President of Business Development starting on or before January
15, 1999 at a base annual salary of $130,000. This position will report to
Martin Brauns, President & CEO. Compensation will include an incentive bonus of
$40,000. This bonus will be paid based on MBO's mutually agreed between you and
your manager. You are entitled to the benefits that Interwoven customarily
makes available to its employees.
Interwoven will assist you with reasonable expenses associated with your
relocation to the Bay Area. The Company will reimburse up to $2,000 in actual
moving-related expenses. Please submit receipts.
In addition, subject to the approval of the Company's Board of Directors,
you shall be entitled to purchase 275,000 shares of Company Common Stock (the
"Shares") at a price to be determined by the Board of Directors. The shares
will vest over a four year period; twenty-five percent (25%) of the Shares will
vest one year after the commencement of employment and, thereafter, an
additional 1/48 of the shares will vest at the end of each month after the first
anniversary of the commencement of employment. Shares that are not vested will
be subject to repurchase by the Company at cost in the event of termination of
employment. In the event of an "Involuntary Termination" (as defined in
Attachment A), the Shares will vest through that termination date irrespective
of the one year "cliff". Should Interwoven experience a Sale of the Company (as
defined in Section 2.1 of the form of Stock Option Agreement for the Company's
1998 Stock Option Plan), the vesting of such Shares will accelerate and you will
become vested with respect to an additional 50% of the total number of Shares
immediately prior to the closing of the Sale of the Company. It will also be
recommended to the Board that you be entitled to purchase an additional 130,000
shares of Common Stock with a risk of expiration based on MBO attainment for
1999, but otherwise subject to the same vesting terms as presented above.
The Company shall loan to you the full amount of the purchase price of the
Shares (the "Loan"). The Loan shall bear interest at an annual rate of 6%. The
Loan will be evidenced by a promissory note in the form attached to this letter,
shall be recourse as to all interest, and as to principal shall be recourse and
non-recourse in such amounts as are mutually agreed by you and the Company. In
the event the Company does not exercise its repurchase option as to "unvested"
Shares, you may require the Company to do so at cost.
<PAGE>
Jeffrey E. Engelmann
December 11, 1998
Page 2
In the event of an Involuntary Termination, the Company shall pay you
severance in an amount equal to two months base salary.
The Company asks that you complete the enclosed "Employee Information and
Inventions Agreement" prior to commencing employment. In part, this Agreement
requests that a departing employee refrain from using or disclosing Interwoven's
Confidential Information (as defined in the Agreement) in any manner which might
be detrimental to or conflict with the business interests of Interwoven or its
employees. This Agreement does not prevent a former employee from using his or
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her general knowledge and experience -- no matter when or how gained -- in any
new field or position. If you should have any questions about the "Employee
Confidential Information and Inventions Agreement," please call me.
We hope that you and Interwoven will find mutual satisfaction with your
employment. All of us at Interwoven are very excited about you joining our team
and look forward to a beneficial and fruitful relationship. Nevertheless,
employees have the right to terminate their employment at any time with or
without cause or notice, and the Company reserves for itself an equal right.
Nothing in this letter is intended to modify this at will employment
relationship. We both agree that any dispute arising with respect to your
employment, the termination of that employment, or a breach of an covenant of
good faith and fair dealing related to your employment, shall be conclusively
settled by arbitration in accordance with the Voluntary Labor Arbitration Rules
of the American Arbitration Association (AAA) at the AAA office in San Jose.
For purposes of federal immigration law, you will be required to provide
Interwoven documentary evidence of your identity and eligibility for employment
in the United States. Such documentation must be provided to us within three
business days of your date of hire, or our employment relation ship will be
terminated.
This letter and the "Employee Confidential Information and Inventions
Agreement" contain the entire agreement with respect to your employment. The
terms of this offer may only be changed by written agreement, although the
Company may from time to time, in its sole discretion, adjust the salaries and
benefits paid to you and its other employees. Should you have any questions
with respect to any of the items indicated above, please call me. Kindly
indicate your consent to this employment agreement by signing and returning a
copy of this letter and a completed "Employee Confidential Information and
Inventions Agreement" to me by December 16, 1998.
Very truly yours,
/s/ Martin Brauns
Martin Brauns
President & CEO
ACCEPTED:
/s/ Jeffrey E. Engelmann
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Jeffrey E. Engelmann
12/15/98
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Date
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Attachment A
An Involuntary Termination is a termination of employment by Interwoven
without "Cause." For such purposes, the term Cause means (i) the conviction of
any felony; (ii) any willful act or acts of dishonesty undertaken by employee
and intended to result in substantial gain or personal enrichment of employee at
the expense of the Company; (iii) any willful act of gross misconduct that is
materially and demonstrably injurious to the Company, or (iv) willful and
continued failure to substantially perform his duties with the Company (other
than incapacity due to physical illness); provided that the action or conduct
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described in clause (iv) will constitute "Cause" only if it continues after the
Company has provided employee with written notice thereof and a reasonable
opportunity (if not less than 30 days) to cure the same.
An Involuntary Termination shall also include a termination by employee
within 30 days following (i) the relocation of the Company's principal executive
offices, or of employee's principal place of business, more than fifty (50)
miles from the Company's executive offices in Sunnyvale, California, or (ii) a
material diminution in employee's salary or benefits or reporting
responsibilities not agreed to by employee.