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EXHIBIT 10.15  

 
 

PAYPAL, INC.
  
    SEPARATION AGREEMENT AND MUTUAL RELEASE    
  

    This Separation Agreement and Mutual Release ("Agreement") is made by and between PayPal, Inc., a
Delaware corporation (the "Company"), and Elon Musk ("Mr. Musk" or
"Employee"). 

    Mr. Musk
has been an employee and officer, and is a founder and member of the Board of Directors (the "Board"), of the Company.
The Company and Mr. Musk (the "Parties") have mutually agreed to terminate their employment relationship, to release each other from any claims
arising from or related to this relationship and to enter into this Agreement. 

    In
consideration of the mutual promises made herein and other valuable consideration, receipt of which is hereby acknowledged, the Parties agree as follows: 

    1.  Resignation and Termination of Employment.  The Parties agree and acknowledge
that Mr. Musk resigned as Chief Executive Officer and President of the Company effective September 24, 2000 (the "Resignation Date"). In
addition, the Parties agree and acknowledge that Mr. Musk continued as an employee of the Company for the period beginning on the Resignation Date and ending on March 9, 2001 (the  "Termination Date").

    2.  Employee Benefits.  

    (a) The
Parties agree and acknowledge that Mr. Musk continued to receive the Company's life, medical, dental and vision insurance benefits at Company expense
until March 31, 2001, which date is the "qualifying event" date under the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended  ("COBRA"). After such date, Mr. Musk has the right
to continue coverage, at his own expense, under these programs pursuant to COBRA, provided he
properly elects such coverage. Except
as otherwise set forth in this Section 2(a), Mr. Musk shall not be entitled to participate in any of the Company's benefit plans or programs offered to employees or officers of the
Company after the Termination Date. 

    (b) The
Company shall reimburse Mr. Musk for all reasonable business expenses incurred by Mr. Musk up until the Termination Date in accordance with
Company policy. 

    3.  Stock Matters.  All share numbers reflected in this Agreement are stated on a
post-split basis. 

    (a)  Common Stock.  The Parties acknowledge and agree that Mr. Musk
purchased 6,000,000 shares of Common Stock (the "Common Shares") pursuant to two Common Stock Purchase Agreements, one relating to a purchase for cash
of 5,400,000 shares, with a purchase price of $0.00333 per share, dated March 20, 1999 (the "First Common Stock Agreement") and one relating to a
purchase upon issuance of a promissory note to the Company in the amount of $19,998 (the "Common Stock Note") (plus cash in the amount of par value) of
600,000 shares, with a purchase price of $0.03333 per share, dated May 20, 1999 (the "Second Common Stock Agreement," and together with the First
Common Stock Agreement, the "Common Stock Agreements"). Mr. Musk agrees and acknowledges that the Company's repurchase right, as provided for in
Section 3(a) of each of the Common Stock Agreements, with respect to the Common Shares, shall have lapsed as of the Termination Date as to 3,000,000 shares and, effective on the Termination
Date and for a period of 60 days thereafter, the Company has the right to repurchase, at Mr. Musk's original cost, 3,000,000 of the shares that are unvested as of that date (the  "Unvested Shares"). In addition, the Company shall release and irrevocably waives its repurchase right as to an additional 1,000,000 shares of the
Unvested Shares (900,000 shares under the First Common Stock Purchase Agreement and 100,000 shares under the Second Common Stock Purchase Agreement), so that Mr. Musk shall own outright, and
the Company shall have no right to repurchase, an aggregate of 4,000,000 shares (the "Vested Shares") and the Company shall have a repurchase right as
to an aggregate of 2,000,000 shares (the "Repurchase Shares"). The Company hereby (meaning, by delivery of this draft Agreement) gives Mr. Musk
notice of its 

 

intent to repurchase the Repurchase Shares, for an aggregate purchase price of $12,666.00 (1,800,000 shares at $0.00333 per share pursuant to the First Common Stock Agreement and 200,000 shares of
$0.03333 per share pursuant to the Second Common Stock Agreement). The Company shall cancel the Common Stock Note as to $12,666 of its principal amount in satisfaction of its repurchase right with
respect to the Repurchase Shares. Mr. Musk agrees and acknowledges that he owes the Company the remainder of the principal and all accrued interest payable under the Common Stock Note, or an
aggregate of $9,201.45 ($7,134.00 of principal and $2,061.45 of accrued interest), which amount he shall pay by delivering to the Company a check for such amount at the time he delivers an executed
copy of this Agreement to the Company. At that time, the Company shall deliver a stock certificate reflecting the Vested Shares. Mr. Musk agrees and acknowledges that the Vested Shares continue
to be subject to the provisions of the Common Stock Agreements (except with respect to Section 3(a) thereof). 

    (b)  Series A Preferred Stock.  The Parties agree and acknowledge that
Mr. Musk owns 21,000,000 shares of the Company's Series A Preferred Stock purchased pursuant to a Series A Preferred Stock Purchase Agreement dated May 20, 1999 among the
Company, Mr. Musk and certain other parties (the "Series A Agreement"). The Parties agree and acknowledge that these shares are vested and
that they continue to be subject to the terms and provisions of the Series A Agreement. 

    (c)  Series B Preferred Stock.  The Parties agree and acknowledge that, on
July 11, 2000, the Company transferred its repurchase right applicable to 3,149,055 shares of its Series B Preferred Stock owned by William Harris to Mr. Musk. Mr. Musk
purchased these shares by paying to Mr. Harris $0.476333 per share and by issuing to the Company a promissory note (the "Series B Note")
in the principal amount of $389,433.14 (or, $0.123667 per share), plus interest compounded semiannually at a rate of 6.62%. The Parties agree and acknowledge that the shares of Series B
Preferred Stock purchased by Mr. Musk from Mr. Harris are vested. 

    (d)  Series C Preferred Stock.  The Parties agree and acknowledge that
Mr. Musk owns 181,818 shares of the Company's Series C Preferred Stock purchased pursuant to a Series C Preferred Stock Purchase Agreement dated March 31, 2000 among the
Company, Mr. Musk and certain other parties (the "Series C Agreement"). The Parties agree and acknowledge that these shares are vested and
that they continue to be subject to the terms and provisions of the Series C Agreement. 

    (e)  Series D Preferred Stock.  The Parties agree and acknowledge that
Mr. Musk owns 333,333 shares of the Company's Series D Preferred Stock purchased pursuant to a Series D Preferred Stock Purchase Agreement dated August 7, 2000 among the
Company, Mr. Musk and certain other parties (the "Series D Agreement"). The Parties agree and acknowledge that these shares are vested and
that they continue to be subject to the terms and provisions of the Series D Agreement. 

    (f)  Other Agreements.  The Parties agree and acknowledge that they are parties
to an Amended and Restated Investors' Rights Agreement, together with certain other parties, dated August 7, 2000 (the "Rights Agreement"), which
Agreement imposes certain rights and restrictions on the shares of Company stock owned by Mr. Musk. The Parties agree and acknowledge that they continue to be bound by the Rights Agreement as
it relates to shares of Company stock owned by Mr. Musk, all as set forth in the Rights Agreement. 

    (g)  Sale of Preferred Stock.  

    (i)  Series C Preferred Stock Closing.  On or before the third business day after the Effective
Date, Mr. Musk shall sell to the Company, and the Company shall purchase from Mr. Musk, 90,909 shares of Series C Preferred Stock owned by Mr. Musk at $2.75 per share for a
total purchase price of $249,999.75. At the closing, Mr. Musk shall deliver the certificates 

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evidencing the shares of Series C Preferred Stock being sold to the Company and the Company shall deliver to Mr. Musk a check in the amount of $249,999.75. 

    (ii)  Series D Preferred Stock Closing.  On or before the third business day after the Effective
Date, Mr. Musk shall sell to the Company, and the Company shall purchase from Mr. Musk, 166,667 shares of Series D Preferred Stock owned by Mr. Musk at $3.00 per share for
a total purchase price of $500,001.00. At the closing, Mr. Musk shall deliver the certificates evidencing the shares of Series D Preferred Stock being sold to the Company and the Company
shall deliver to Mr. Musk a check in the amount of $500,001.00. 

    (h)  General.  Except as set forth in this Section 3 and in the Common
Stock Agreements, the Series A Agreement, the Series B Agreement, the Series C Agreement, the Series D Agreement and the Rights Agreement, Mr. Musk acknowledges that
he has no right, title or interest in or to any shares of the Company's capital stock under any of the above listed agreements, or any other agreement or arrangement (oral or written) with the Company
or any other party. 

    4.  Amendment of Series B Note.  In consideration of Mr. Musk's
release of claims made herein, and other promises and undertakings made by him in this Agreement, the Company agrees that the term of the Series B Note is hereby amended to provide that such
note shall not become due and payable on the Termination Date (as provided for under such note), but instead its term shall be extended to provide that the Series B Note shall become due and
payable in full as to all principal and accrued interest on July 11, 2004 (the original maturity date of the note). Notwithstanding the foregoing, in the event of the earlier to occur of a
Change of Control or an IPO (each, as defined below), the Company hereby agrees to forgive and cancel the Series B Note and that Mr. Musk shall be released and discharged from his
obligations to pay the principal and all accrued interest under the Series B Note. "Change of Control" means a sale of all or substantially all
of the Company's assets, or any merger or consolidation of the Company with or into another corporation other than a merger or consolidation in which the holders of more than 50% of the shares of
capital stock of the Company outstanding immediately prior to such transaction continue to hold (either by the voting securities remaining outstanding or by their being converted into voting
securities of the surviving entity) more than 50% of the total voting power represented by the voting securities of the Company, or such surviving entity, outstanding immediately after such
transaction. "IPO" means a firm commitment underwritten public offering by the Company of shares of its Common Stock pursuant to a registration
statement under the Securities Act, which results in aggregate cash proceeds to the Company not less than $25,000,000 (net of underwriting discounts and commissions). Mr. Musk agrees to
indemnify and hold the Company harmless from any and all liabilities, costs or expenses relating to any tax (including without limitation any income, excise or employment tax) liability, withholding
obligations, interest, penalties or additions to tax that may be assessed against the Company by the Internal Revenue Service or any state tax authority as a result of any benefits conferred under
this Section 4. 

    5.  Deletion of Reference to "Founders".  The Company acknowledges and agrees
that Mr. Musk is a founder of the Company and its predecessor X.com. The Company agrees that, within ten days after the effective date of this Agreement, all references to "founders" of the
Company will be removed from
the Company's website and from the "about" section of all future Company press releases. In addition, the Company shall refrain from stating who the founders of the Company are or making statements
quoted in the press that undermine Mr. Musk's status as a "founder" of X.com or the Company when communicating with the media or other external third parties. In the event the Company breaches
its obligations under this Section 5(a), Mr. Musk may sell to the Company, and the 

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Company shall purchase from Mr. Musk, shares of Series C and Series D Preferred Stock owned by Mr. Musk, at his original purchase price, as follows: 

	 
	 	 

	90,909 shares of Series C Preferred at $2.75/share; aggregate:	 	 	249,999.75
	166,667 shares of Series D Preferred at $3.00/shares; aggregate:	 	 	500,001.00
	 	 	

	 	

Total:	
 	
$	

750,000.75
	 	 	

In
the event that Mr. Musk wishes to sell shares of Preferred Stock to the Company under this Section 5(a), he shall provide written notice to the Company of his intent to this effect
after the alleged breach and a summary of the facts giving rise to the breach. The closing of this sale shall occur within five business days after receipt of the notice and a satisfactory statement
of facts giving rise to the breach. At such closing, Mr. Musk shall deliver the certificates evidencing the shares of Series C and Series D Preferred Stock being sold to the
Company and the Company shall deliver to Mr. Musk, within 30 business days, a check in the amount of $750,000.75. In the event the Company disagrees with Mr. Musk's assertion that the
Company has breached this Section 5(a), the Company or Mr. Musk may seek to have the matter settled by the procedures set forth in Section 14. Nothing in this Section 5
shall impair or affect Mr. Musk's right to seek additional injunctive relief as a remedy for a breach of this Section 5. 

    6.  Employee and Mutual Covenants.  

    (a)  Confidential Information.  Mr. Musk represents and warrants that he
has not breached his obligations to the Company under the terms of the Confidential Information and Invention Assignment Agreement he executed June 22, 2000 (the  "Confidentiality Agreement"), a
copy of which is attached hereto as Exhibit A. Mr. Musk
understands and agrees that his obligations to the Company under the Confidentiality Agreement survive the termination of his relationship with the Company under this Agreement. Mr. Musk
further agrees to execute the Termination Certification attached as Exhibit B to the Confidentiality Agreement. 

    (b)  Confidentiality of Terms.  The Parties agree, on their own behalf and on
behalf of their representatives, to keep the terms and amount of this Agreement completely confidential and that they will not hereafter disclose any such information concerning this Agreement to
anyone, unless required or permitted to do so by law. Mr. Musk may disclose the terms of this Agreement to his spouse and his accountants, tax advisors or preparers, each of whom shall be
required to maintain the confidentiality of this Agreement. The Company may disclose the terms of this Agreement to certain of its employees who need to know, its board members, its accountants,
lawyers, tax advisors or preparers, or other advisors who need to know, each of whom shall be required to maintain the confidentiality of this Agreement. 

    (c)  Nondisparagement.  The Parties also agree that they will not, either
directly or indirectly, hereafter make any defamatory, negative or denigrating comments of any type or nature whatsoever about each other (or the other Party's employees, officers, agents,
consultants, affiliates, investors or business partners) to anyone. 

    7.  No Other Payments Due.  The Parties agree that the Company has paid
Mr. Musk all salary owed him through the Termination Date, and that the Company has paid him all bonuses, accrued vacation and other sums as are due to him. By executing this Agreement,
Mr. Musk hereby acknowledges receipt of all such payments as received, and acknowledges that, in light of the payment 

4

 

by the Company of all wages due to him, California Labor Code Section 206.5 is not applicable to the Parties hereto. That section provided in pertinent part as follows: 

No
employer shall require the execution of any release of any claim or right on account of wages due, or to become due, or made as an advance on wages to be earned, unless payment of such wages has
been made. 

    8.  Release of Claims.  In consideration for the obligations of both parties set
forth in this Agreement and for other valuable consideration, Mr. Musk and the Company, on behalf of themselves, and their respective heirs, executors, officers, directors, employees,
investors, stockholders, administrators and assigns, hereby fully and forever release each other and their respective heirs, executors, officers, directors, employees, investors, stockholders,
administrators, parent and subsidiary corporations, predecessor and successor corporations and assigns, of and from any claim, duty, obligation or cause of action relating to any matters of any kind,
whether presently known or unknown, suspected or unsuspected, that any of them may possess arising from any omissions, acts or facts that have occurred up until and including the Effective Date of
this Agreement including, without limitation: 

    (a) any
and all claims relating to or arising from Mr. Musk's employment relationship with the Company and the termination of that relationship; 

    (b) any
and all claims relating to, or arising from, Mr. Musk's right to purchase, or actual purchase of shares of stock of the Company; 

    (c) any
and all claims for wrongful discharge of employment; breach of contract, both express and implied; breach of a covenant of good faith and fair dealing, both
express and implied, negligent or intentional infliction of emotional distress; negligent or intentional misrepresentation; negligent or intentional interference with contract or prospective economic
advantage; negligence; and defamation; 

    (d) any
and all claims for violation of any federal, state or municipal statute, including, but not limited to the Civil Rights Act of 1866, as amended, the Civil
Rights Act of 1964, as amended, the California Fair Employment and Housing Act, as amended, the federal and state family leave acts, the Age Discrimination in Employment Act of 1967, the Older
Workers' Benefit Protection Act, the Americans with Disabilities Act of 1990, and the Civil Rights Act of 1991); 

    (e) any
and all claims arising out of any other laws and regulations relating to employment or employment discrimination; and 

    (f)  any
and all claims for attorneys' fees and costs. 

    The
Company and Mr. Musk agree that the release set forth in this Section 8 shall be and remain in effect in all respects as a complete general release as to the matters
released. This release does not extend to any obligations incurred or specified under this Agreement. 

    9.  Civil Code Section 1542.  The Parties represent that they are not
aware of any claim by either of them other than the claims that are released by this Agreement. Mr. Musk and the Company acknowledge that they are familiar with the provisions of California
Civil Code Section 1542, which provides as follows: 

A
GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR SUSPECT TO EXIST IN HIS FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH IF KNOWN BY HIM MUST HAVE MATERIALLY AFFECTED
HIS SETTLEMENT WITH THE DEBTOR. 

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    Mr. Musk
and the Company, being aware of said Code section, agree to expressly waive any rights they may have thereunder, as well as under any other statute or common law
principles of similar effect. 

    10.  Breach of Agreement.  The Parties agree and acknowledge that upon breach by
either Party of this Agreement, including the covenants contained in Sections 5 or 6 above, the other Party would sustain irreparable harm, and, therefore, they agree that in addition to any other
remedies that they may have under this Agreement or otherwise, each Party shall be entitled to obtain equitable relief, including specific performance and injunctive relief, restraining the other
Party from committing or continuing any such breach or directing such Party to perform its obligations pursuant to this Agreement. 

    11.  Authority.  The Company represents and warrants that the undersigned has the
authority to act on behalf of the Company and to bind the Company and all who may claim through it to the terms and conditions of this Agreement. Mr. Musk represents and warrants that he has
the capacity to act on his own behalf and on behalf of all who might claim through him to bind them to the terms and conditions of this Agreement. Each Party warrants and represents that there are no
liens or claims of lien or assignments in law or equity or otherwise of or against any of the claims or causes of action released herein. 

    12.  No Representations.  Neither Party has relied upon any representations or
statements made by the other Party hereto which are not specifically set forth in this Agreement. 

    13.  Severability.  In the event that any provision hereof becomes or is declared
by a court or other tribunal of competent jurisdiction to be illegal, unenforceable or void, this Agreement shall continue in full force and effect without said provision. 

    14.  Arbitration.  The Parties shall attempt to settle all disputes arising in
connection with this Agreement through good faith consultation. In the event no agreement can be reached on such dispute within thirty (30) days after notification in writing by either Party to
the other concerning such dispute, the dispute shall be settled by binding arbitration to be conducted in Santa Clara County, California before an arbitrator to be mutually agreed upon. If the Parties
cannot agree, they shall submit the matter to the presiding judge of Santa Clara County, who shall select an arbitrator based on input from the Parties. The arbitration decision shall be final,
conclusive and binding on both Parties and any arbitration award or decision may be entered in any court having jurisdiction. The Parties agree that the prevailing party in any arbitration shall be
entitled to injunctive relief in any court of competent jurisdiction to enforce the arbitration award. The Parties further agree that the prevailing Party in any such proceeding shall be awarded
reasonable attorneys' fees and costs. This Section 14 shall not apply to the Confidentiality Agreement. The parties hereby waive any rights they may have to trial by
jury in regard to arbitrable claims.

    15.  Entire Agreement.  This Agreement, the exhibits hereto and the other
agreements referenced in this Agreement (as such other agreements are amended by this Agreement), represent the entire agreement and understanding between the Company and Mr. Musk concerning
Mr. Musk's separation from the Company, and supersede and replace any and all prior agreements and understandings concerning Mr. Musk's employment relationship with the Company,
termination of that relationship, his compensation by the Company and his ownership and interests in any capital stock of the Company. Notwithstanding the above, the Non-Competition
Agreement between Mr. Musk and the Company dated March 30, 2000 remains in full force and effect pursuant to its terms. 

    16.  No Oral Modification.  This Agreement may only be amended in writing signed
by Mr. Musk and the Company. 

    17.  Governing Law.  This Agreement shall be governed by the laws of the State of
California, without regard to its conflicts of law provisions. 

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    18.  Effective Date.  This Agreement is effective upon execution by both Parties
(the "Effective Date").

    19.  Counterparts.  This Agreement may be executed in counterparts, and each
counterpart shall have the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned. 

    20.  Assignment.  This Agreement may not be assigned by Mr. Musk or the
Company without the prior written consent of the other party. Notwithstanding the foregoing, this Agreement may be assigned by the Company to a corporation controlling, controlled by or under common
control with the Company, including a successor to the Company, without the consent of Mr. Musk. 

    21.  Voluntary Execution of Agreement.  This Agreement is executed voluntarily
and without any duress or undue influence on the part or behalf of the Parties hereto, with the full intent of releasing all claims. The Parties acknowledge that: 

    (a) they
have read this Agreement; 

    (b) they
have been represented in the preparation, negotiation, and execution of this Agreement by legal counsel of their own choice or that they have voluntarily
declined to seek such counsel; provided that both Parties acknowledge and agree that Venture Law Group solely represents the Company in connection with this Agreement, and generally, and does not
represent Mr. Musk individually in any capacity; 

    (c) they
understand the terms and consequences of this Agreement and of the releases it contains; and 

    (d) they
are fully aware of the legal and binding effect of this Agreement. 

    The
Parties have executed this Separation Agreement and Mutual Release on the respective dates set forth below. 

	 	 	PayPal, Inc.
	

Dated as of May 4, 2001	
 	

By: /s/ John Muller

Title: General Counsel and Secretary
	

 	
 	

Elon R. Musk, an individual
	

Dated as of May 4, 2001	
 	

/s/ Elon R. Musk
 Elon R. Musk

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   EXHIBIT 10.16  

    August 27th,
2001 

    Mr. H.
David Johnson

3 Willow Spring Court

Moraga, CA 94556

(925) 376-6439 

Re: Settlement Agreement and Release of Claims  

Dear
Mr. Johnson: 

This
letter constitutes a settlement agreement and release of claims ("Agreement") that compromises, settles and discharges any and all claims that you may have against PayPal, Inc. (the
"Company") including those arising from your employment as Chief Financial Officer, the termination of your employment on August 8th, 2001, and the events surrounding the
termination of your employment. You and the Company may be referred to in this Agreement as "Parties," collectively, or as a "Party," individually. 

    1.  Separation.  Your last day of work with the Company and your employment termination date was
August 8th, 2001 (the "Separation Date"). 

    2.  Payment.  Although the Company has no policy or procedure requiring payment of any severance
benefits, the Company will pay you the gross lump sum amount of $75,000.00, subject to standard payroll deductions and withholdings. That amount will be paid in a lump sum by check within the day you
sign this Agreement and return it to the Company by hand. 

    3.  Restricted Stock.  Although the Company has no policy or procedure requiring the grant of additional
restricted stock, you will be eligible to vest an additional 168,750 Restricted Stock shares previously purchased by you pursuant to the Company's Restricted Stock plan the day you sign this agreement
and return it to the company by hand. All remaining Restricted shares previously granted to you will expire unvested on August 8th, 2001. As your start date was 11/8/99, through
your separation date you will have vested 21 months of Restricted Stock or 590,625 shares. As you were granted a recourse loan to purchase your initial Restricted Stock, you will need to submit
a check for $22,781.25 for the balance of your unvested Restricted Stock shares. 

    4.  Medical Benefits.  Although the Company has no policy or procedure requiring the payment of COBRA
premiums, should you elect to participate in COBRA, the Company agrees to pay for your medical, dental and vision monthly premium costs ($678.38 per month) for a maximum total of six months, or a
maximum value of $4,070.28. At the end of six months, you will be responsible for this monthly premium should you choose to continue to participate in COBRA. Should you elect COBRA, you will receive
invoices on a monthly basis, please forward these invoices as soon as you receive them directly to me for payment. 

    5.  Other Compensation or Benefits.  You acknowledge that, except as expressly provided in this
Agreement, you will not receive any additional compensation, severance or benefits after the Separation Date. 

    6.  Return of Company Property.  Within five (5) days after the Effective Date, you agree to
return to the Company all Company documents (and all copies thereof) and other Company property that you have had in your possession at any time, including, but not limited to, Company files, notes,
drawings, records, business plans and forecasts, financial information, specifications, computer-recorded information, tangible property (including, but not limited to, computers), credit cards, entry
cards, 

1

 

identification badges and keys; and, any materials of any kind that contain or embody any proprietary or confidential information of the Company (and all reproductions thereof). 

    7.  Proprietary Information Obligations.  You will refrain from any use or disclosure of the Company's
proprietary or confidential information or materials, unless such use is authorized in writing by an appropriate Company representative. 

    8.  Confidentiality.  The provisions of this Agreement will be held in strictest confidence by you and
the Company and will not be publicized or disclosed in any manner whatsoever; provided, however, that: (a) you disclose this Agreement to your
immediate family; (b) the Parties may disclose this Agreement in confidence to their respective attorneys, accountants, auditors, tax preparers, and financial advisors; (c) the Company
may disclose this Agreement as necessary to fulfill standard or legally required corporate reporting or disclosure requirements; and (d) the Parties may disclose this Agreement insofar as such
disclosure may be necessary to enforce its terms or as otherwise required by law. In particular, and without limitation, you agree not to disclose the terms of this Agreement to any current or former
Company employee. You and the Company will respond to inquiries in words to the effect of: "Dave Johnson left PayPal, Inc. for personal reasons." 

    9.  Nondisparagement.  The Company agree not to disparage you, and you agree not to disparage the Company
or the Company's other officers, directors, employees, shareholders and agents, in any manner likely to be harmful to the Parties or their business, business reputation or personal reputation;
provided that you and the Company may respond accurately and fully to any question, inquiry or request for information when required by legal process. 

    10.  Releases.  

    8.1. In
exchange for the payment and other consideration under this Agreement to which you would not otherwise be entitled, you agree to execute the Employee Agreement
and Release attached hereto as Exhibit A. 

    8.2. The
releases attached hereto as Exhibit A expressly do not apply to or limit: (1) your rights to indemnification (if any) by the Company;
(2) either your potential claims with regard to the Company's future activities, or the Company's potential claims with regard to your future activities; or (3) any Party's rights to
enforce the terms of this Agreement. 

    11.  Miscellaneous.  This Agreement, including Exhibit A, constitutes the complete, final and
exclusive embodiment of the entire agreement among the Parties with regard to this subject matter. Each of the Parties represents, warrants and agrees that it has received independent legal advice
from counsel with respect to the advisability of making the release and settlement provided for herein and with respect to the advisability of executing this Agreement. 

Each
signatory below represents that he has the indicated Party's full authority to execute this Agreement on the Party's behalf. Furthermore, each of the Parties acknowledges that the Party has read
and understands this Agreement, and that the Party signs its release of all claims voluntarily, with the full appreciation that at no time in the future may the Party pursue any of the rights of the
Party has waived in this Agreement, including Exhibit A. This Agreement is entered into without reliance on any promise or representation, written or oral, other than those expressly contained
herein, and it supersedes any other such promises, warranties or representations. This Agreement may not be
modified or amended except in a writing signed by you, and a duly authorized officer of the Company. This Agreement will bind the heirs, personal representatives, successors and assigns of you and the
Company and inure to the benefit of you and the Company and your, or its heirs, successor and assigns. If any provision of this Agreement is determined to be invalid or unenforceable, in whole or in
part, this determination will not affect any other provision of this Agreement and the provision in question will be modified by the court so as to be rendered enforceable. This Agreement will be 

2

 

deemed to have been entered into and will be construed and enforced in accordance with the laws of the State of California. 

If
this Agreement is acceptable to you please sign below and on the attached Employee Agreement and Release, which is part of this Agreement, and return the originals of both to me by hand. 

Sincerely, 

	PAYPAL, INC.	 	 
	

By:	
 	

/s/ SAL GIAMBANCO   
 Sal Giambanco

Vice President, HR and Administration	
 	

 
	
EXHIBIT A—EMPLOYEE AGREEMENT AND RELEASE	
 	

 
	
ACCEPTED AND AGREED BY H. DAVID JOHNSON:	
 	

 
	

/s/ H. DAVID JOHNSON   
 H. David Johnson	
 	

 

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EXHIBIT A

CONFIDENTIALITY AGREEMENT  

 
 

Exhibit A
  
    EMPLOYEE AGREEMENT AND RELEASE    
  

    I agree to the terms described in the foregoing letter Agreement. 

    Except
as otherwise set forth in this Agreement, I hereby release, acquit and forever discharge the Company, its subsidiaries, and their officers, directors, agents, servants,
employees, attorneys, shareholders, successors, assigns and affiliates, of and from any and all claims, liabilities, demands, causes of action, costs, expenses, attorneys fees, damages, indemnities
and obligations of every kind and nature, in law, equity, or otherwise, known and unknown, suspected and unsuspected, disclosed and undisclosed, arising out of or in any way related to agreements,
events, acts or conduct at any time prior to and including the date this Agreement is signed, including but not limited to: all such claims and demands directly or indirectly arising out of or in any
way connected with my employment with the Company, the termination of that employment or the events surrounding the termination; claims or demands related to salary, bonuses, commissions, stock, stock
options, or any other ownership interest in the Company, vacation pay, fringe benefits, expense reimbursements, severance pay, or any other form of compensation; and claims pursuant to any federal,
state or local law, statute or cause of action including, but not limited to, the federal Civil Rights Act of 1964, as amended, the federal Americans with Disabilities Act of 1990, the California Fair
Employment and Housing Act, as amended, tort law, contract law, wrongful discharge, discrimination, harassment, fraud, defamation, emotional distress, and breach of the implied covenant of good faith
and fair dealing. 

    I
UNDERSTAND THAT THIS AGREEMENT INCLUDES A RELEASE OF ALL KNOWN AND UNKNOWN CLAIMS. In giving this release, which includes claims that may be unknown to me at present, I acknowledge
that I have read and understand Section 1542 of the California Civil Code which reads as follows: "A general release does not extend to claims which the creditor does
not know or suspect to exist in his favor at the time of executing the release, which if known by him must have materially affected his settlement with the debtor." I expressly
waive and relinquish all rights and benefits under that section and any law of Nebraska or any other jurisdiction of similar effect with respect to my release of any unknown or unsuspected claims I
may have against the Company. 

	 	 	By:	 	/s/
 H. David Johnson
	

 	
 	

Date:	
 	

August 29, 2001

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Exhibit A EMPLOYEE AGREEMENT AND RELEASE

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