EXHIBIT 10.2

January 9, 2003

Michael Shahbazian
1292 Estate Drive
Los Altos, CA 94024

Dear Michael,

Congratulations on accepting a position with Niku Corporation (the “Company”) as
Senior Vice President and Chief Financial Officer reporting directly to me, Josh
Pickus, commencing on 01-20-03. You will receive an annual salary of $225,000,
less applicable withholding in accordance with our normal payroll procedures.
You will have an annual bonus potential of $50,000 based on individual
milestones to be agreed upon between you and the Company. Furthermore, you are
eligible to receive certain employee benefits, which will be outlined in the
Company’s Benefit Brochure. Like all employees, you will be entitled to vacation
time and paid company holidays each year.

In connection with the commencement of your employment, the Company will
recommend that its Board of Directors grant you an option to purchase 120,000
shares (post split) of the Company’s Common Stock with an exercise price equal
to the fair market value on the date of the grant. The option will vest at the
rate of 1/4th after one year and 1/48th per month thereafter (so that the option
is fully vested after four years). Vesting will, of course, depend on your
continued employment with the Company. The option will be a non-qualified stock
option to the maximum extent allowed by the tax code and will be subject to the
terms of the Company’s 2001 Equity Incentive Plan and the Stock Option Agreement
between you and the Company. The option will accelerate and become fully vested
upon a change in control of the Company.

In addition, we have agreed that we will develop an Executive Bonus Program
based on Company performance and that we will target a payoff for you under that
plan at 50% of your base salary upon full achievement of Company objectives. We
have also agreed that we will jointly develop and present to the Compensation
Committee a proposal relating to executive severance arrangements. Both of these
proposals will, of course, be subject to the approval of the Compensation
Committee.

Your employment is at-will and for no specified period, and either you or the
Company may terminate this employment relationship at anytime and for any
reason. As an employee, you will be expected to abide by the Company’s policies
and to devote all of your business time, skill, attention and best efforts to
Company business so as to fulfill the responsibilities assigned to you. Your
acceptance of this offer and commencement of employment with the Company is
contingent upon the execution and delivery of the Company’s Confidential
Information and Invention Assignment Agreement (the “Confidentiality
Agreement”), a copy of which is enclosed for your review and execution. For
purposes of federal immigration law, you will be required to provide to the
Company documentary evidence of your identity and eligibility for employment in
the United States. Such documentation must be provided within three (3) business
days of your date of hire, or our employment relationship with you may be
terminated.

You agree to follow the Company’s strict policy that employees must not
disclose, either directly or indirectly, any information, including any of the
terms of this agreement, regarding salary, bonuses, or stock option allocations
to any person, including other employees of the Company; provided, however, that
you may discuss such terms with members of your immediate family and any legal,
tax or accounting specialists who provide you with individual legal, tax or
accounting advice.

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This employment offer will expire if not accepted by Friday, January 10th, 2003.
To accept the offer before this expiration date, you must sign and date this
letter in the space provided below and return it to me, along with a signed and
dated copy of the Confidentiality Agreement. This letter, together with the
Confidentiality Agreement, sets forth the terms of your employment with the
Company and supersedes any prior representations or agreements, whether written
or oral. This letter may not be modified or amended except by a written
agreement, signed by the Company and by you.

Sincerely,

Niku Corporation,

    BY:   /s/ Joshua Pickus

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Josh Pickus Chief Executive Officer

AGREED AND ACCEPTED:

Michael Shahbazian

                    /s/ Michael Shahbazian

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Signature

                    1/10/2003

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Date

enclosure: Confidential Information and Invention Assignment