exv10w7



 





Exhibit 10.7









October 10, 2006




Bruce Felt




Dear Bruce:




     On behalf of Success Acquisition Corporation, dba SuccessFactors, Inc. (the
“Company”), I am ecstatic to offer you employment with the Company on the terms set forth
below.




	1.	 	Position. You will start in a position as CFO, reporting to me, Lars Dalgaard,
President and CEO. You will work out of our office located in San Mateo, CA. By signing this
letter, you confirm with the company that you are under no contractual or other legal
obligations that would prohibit you from performing your duties with the Company.






	2.	 	Compensation. You will be paid $235,000 on an annualized basis, which is equivalent
to semi-monthly wages of $9,791.67, less payroll deductions and all required withholdings.
You will be paid your salary in accordance with the Company’s regular payroll policy. The
Company may modify compensation from time to time as it deems necessary. You will be eligible
for a 45% annual performance bonus, or $105,750 upon reaching certain mutually established
goals set by you and the Company.
	 
	 	 	This makes the total On Target Earning $340,750.00.






	3.	 	Stock Option. We will recommend to the Board of Directors (the “Board”) of the
Company that, at the next board meeting after your commencement date, you be granted, at your
election, either an incentive stock option or non-qualified stock option (the “Option”)
entitling you to purchase up to 500,000 (FIVE HUNDRED THOUSAND) shares of Common Stock of the
Company at the then current fair market value price as determined by the Board at that
meeting. The Option will be immediately exercisable. Subject to Board approval, the shares
subject to the Option shall vest pursuant to a four-year vesting schedule, which shall provide
that twenty-five percent (25%) of the shares subject to the Option shall become vested after
you complete one year of continuous full time service with the Company, and one forty-eighth
(1/48th) of the shares subject to the Option shall vest for each month of your
continuous full time service thereafter. Your Option shall be subject to the terms and
conditions of the Company’s Stock Option Plan and form of Stock Option Agreement, which will
be distributed after the Board approves your Option. You will be provided the opportunity to
exercise the Option with a full-recourse promissory note at a fair market rate of interest.
The Note will be due and





	 	 	 	 	 
	 	/s/ BF 	 
	 	Initials of Employee	 




 









 






	 	 	 	 	 





payable upon the earlier of (i) October 2, 2011, (ii) your last day of employment with the
Company, (iii) the date you sell shares for an aggregate sales price greater than the
aggregate exercise price of the Option, (iv) the date the Company files a registration
statement in connection with a public offering and (v) the closing of a merger in which you
will be deemed to be an officer of the combined business. You acknowledge that you are
responsible for obtaining tax advice with regard to the stock option.




	4.	 	Benefits. You will also be entitled to receive the standard employee benefits made
available by the Company to its employees of your same level to the full extent of your
eligibility including, medical, dental and vision insurance, fifteen (15) days Paid Time Off
(“PTO”) and two (2) floating holidays annually. During your employment, you shall be
permitted, to the extent eligible, to participate in the Company’s Flexible Spending Account
plan and 401(k) plan or any other similar benefit plan of the Company that is available to
employees generally. Participation in any such plans shall be consistent with your rate of
compensation to the extent that compensation is a determinative factor with respect to
coverage under any such plan. Details about these benefits plans are available for your
review. Company may modify compensation and benefits from time to time as it deems necessary.






	5.	 	Compliance with Company’s Policies and Procedures. As a Company employee, you will
be expected to abide by the Company’s policies and procedures and acknowledge in writing that
you have read and Company’s Employee Handbook. Your acceptance of this offer and commencement
of employment with the Company is contingent upon the execution of the Company’s Proprietary
Information and Inventions Agreement, a copy of which is enclosed for your review and
execution prior to or on your Start Date.






	6.	 	Employment Relationship. Your employment with the Company will be “at will”, meaning
that either you or the Company may terminate your employment at any time and for any reason,
with or without cause. Any contrary verbal, written or implied representations which may have
been made to you are superseded by this written offer. This is the full and complete
agreement between you and the Company with respect to the subject matters herein. Although
your job duties, title, compensation and benefits, as well as the Company’s personnel policies
and procedures, may change from time to time, the “at will” nature of your employment may only
be changed in an express written agreement signed by you and the Company’s Chief Executive
Officer.






	7.	 	Dispute Resolution Procedure. As a condition of employment with the Company, you
will be required to sign and abide by the terms of the Company’s dispute resolution procedure,
which is incorporated into this offer letter by reference and found in the Company’s
Proprietary Information and Inventions Agreement.






	8.	 	Change of Control. In the event of a change of control transaction described in
sections 16.1(ii), 16.1(iii) or 16.1(iv) of the Company’s 2001 Stock Option Plan, (a “Change
of Control”), in addition to your normal vesting, 50% of your then unvested shares shall vest
in equal monthly installments over the 12 months immediately after the consummation of the
Change of Control. In addition, in the event of a Change of Control and you are involuntarily
terminated without Cause (as defined in the Company’s 2001 Stock Option





	 	 	 	 	 
	 	/s/ BF 	 
	 	Initials of Employee	 



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Plan) by SuccessFactors or a successor company within 12 months of a Change of Control or
you terminate your employment with the Company or a successor company with 12 months of a
Change of Control for. Good Reason (as defined below), then you will receive a full vesting
of all then unvested Shares as of your termination date. “Good Reason” means that you elect
to terminate your employment within 30 days of the occurrence of one or more of the
following events, provided you have also delivered written notice to the Company 10 days
prior to your resignation: (a) the material reduction, without your consent, of the annual
base salary you were paid at the time of the Change of Control; (b) the material diminution
or reduction, without your consent, of your authority, duties or responsibilities within the
combined business (for example, you are not the CFO of the combined entity); or (c)
relocation of the Company’s office at which you work to a location that is more than 50
miles from its current location.




	9.	 	Proof of Right to Work. 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 to us within three (3)
business days of your date of hire, or our employment relationship with you may be terminated.





10. Proportional work and pay





	 	a.	 	Bruce will submit a work schedule as he transitions out of previous company
	 
	 	b.	 	Bruce will not be paid a salary by SuccessFactors for any day he is being paid
a normal salary (not termination benefit) by his current employer. However, Bruce will
vest his options one day (i.e. 0.0685% of the Option) for each day he works at or for
SuccessFactors






	11.	 	Severance






	 	a.	 	if terminated without cause in first year, subject to your execution of a
customary release of claims, Bruce will be offered






	 	i.	 	6 months salary severance
	 
	 	ii.	 	6 months vesting acceleration






	 	b.	 	If terminated without cause after first year, subject to your execution of a
customary release of claims, Bruce will be offered






	 	i.	 	6 months salary severance
	 
	 	ii.	 	3 months vesting acceleration






	12.	 	Tax Protection. We acknowledge that our agreement to provide you with benefits on a
Change in Control (as described above) may result in unintended adverse tax consequences to
you and to the Company if not structured carefully to comply in good faith with the
requirements of Sections 280G and 409A of the Internal Revenue Code.





	 	 	 	 	 
	 	/s/ BF 	 
	 	Initials of Employee	 



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Accordingly, we agree to take the following steps to avoid or minimize such tax consequences
to the full extent permitted by the Code: provided, however, that the Company shall not be
required to increase any benefits to you or make any additional payment to you or reimburse
you for or “gross up” the amount of any tax imposed on you under Section 280G or Section
409A:



     i. For so long as the Company is eligible to do so (i.e., is privately held), the Company will
make best efforts to satisfy the shareholder approval requirements set out in Section 280G(b)(5)
with respect to your benefits on a Change In Control; and



     ii. In the event that the benefits provided for in this Agreement or otherwise payable to you
(i) constitute “parachute payments” within the meaning of Section 280G and (ii) but for this
Section 12(ii), would be subject to the excise tax imposed by Section 4999 then your benefits under
this Agreement or otherwise shall be payable either (a) in full, or (b) as to such lesser amount
which would result in no portion of such benefits being subject to an excise tax under Section
4999, whichever of the foregoing amounts, taking into account the applicable federal, state and
local income taxes and the excise tax imposed by Section 4999, results in your receipt on an
after-tax basis, of the greatest amount of benefits under this Agreement or otherwise,
notwithstanding that all or some portion of such benefits may be taxable under Section 4999.
Unless you and the Company otherwise agree in writing, any determination required under this
Section 12(ii) shall be made in writing by the Company’s independent public accountants (the
“Accountants”), whose determination shall be conclusive and binding upon you and the Company for
all purposes. For purposes of making the calculations required by this Section 12(ii), the
Accountants may make reasonable assumptions and approximations concerning applicable taxes and may
rely on reasonable, good faith interpretations concerning the application of Sections 280G and
4999. You and the Company shall furnish to the Accountants such information and documents as the
Accountants may reasonably request in order to make a determination under this Section 12(ii). The
Company shall bear all costs the Accountants may reasonably incur in connection with any
calculations contemplated by this Section 12(ii); and



     iii. In the event payment of any benefit hereunder would result in adverse tax consequences
under Section 409A, the Company will work with you to take such reasonable steps are necessary to
reform such payment or to amend such payment schedule so as to comply in good faith to avoid or
minimize the imposition of tax on you under Section 409A and its proposed or final regulations
while also providing you, to the extent possible, with the full benefits set out above. Such steps
may include (without limitation) providing for a set payment schedule after the Change In Control
or deferring payment to a future date upon the objective determination by the Company of adverse
tax consequences under Section 409A.


The Company and you agree that in the event (and as of the date) that the IRS issues specific
guidance regarding the treatment of Section 280G payments under Section 409A this agreement will be
amended (if appropriate) to provide the intended benefits in good faith compliance with such
guidance.




     This letter, together with the Proprietary Information and Inventions Agreement, sets forth
the terms of your employment with the Company and supersede any prior representations



	 	 	 	 	 
	 	/s/ BF 	 
	 	Initials of Employee	 



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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.




     We are all delighted to be able to extend you this offer and look forward to working with you.
To indicate your acceptance of the Company’s offer, please sign and date this letter in the space
provided below and return to Human Resources Director, Jennifer Boyd (via confidential fax 408 317
0366), along with a signed and dated copy of the Proprietary Information and Inventions Agreement.



     This offer expires at the close of business, October 11, 2006. In addition, this offer will
be contingent on the results of reference and/or background checks.



	 	 	 	 	 
	Very truly yours,

 	 	 
	
/s/ Lars Dalgaard 	 
	Lars Dalgaard 	 	 
	President and CEO

SuccessFactors, Inc. 	 	 



	 	 	 	 	 
	ACCEPTED AND AGREED:



Bruce Felt

 	 	 
	/s/
Bruce Felt 	 	 
	Signature 	 	 



10/11/06

Date




October 13, 2006

Anticipated Start Date




Attachment: Proprietary Information and Inventions Agreement



	 	 	 	 	 
	 	/s/ BF 	 
	 	Initials of Employee	 




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