CORNERSTONE ONDEMAND, INC. EMPLOYMENT AGREEMENT
Exhibit 10.1
CORNERSTONE ONDEMAND, INC.
This Employment Agreement (the “Agreement”) is effective as of May 1, 2016 (the “Effective Date”) by and between Cornerstone OnDemand, Inc., a Delaware corporation (the “Company”), and Xxxxx X. Xxxxxx (“Executive”).
RECITALS
WHEREAS, the Company wishes to retain the services of Executive and Executive wishes to commence employment with the Company on the terms and subject to the conditions set forth in this Agreement;
NOW THEREFORE, in consideration of the foregoing recital and the respective undertakings of the Company and Executive set forth below, the Company and Executive agree as follows:
1.Duties and Scope of Employment. Effective May 1, 2016 (the “Start Date”), Executive will join the Company as an employee in a non-executive capacity to advise and provide support to the Company’s finance team for a transition period ending on the earlier of: (i) the date determined by the Company’s Chief Executive Officer; or (ii) June 1, 2016. Immediately following the transition period, Executive will assume the role of Chief Financial Officer. Executive shall have the authority generally allowed to persons discharging the duties of such positions. Executive shall perform his duties faithfully and satisfactorily to the performance standards reasonably expected of a person in such positions. Executive will render such business and professional services in the performance of his duties, consistent with Executive’s position within the Company, as will reasonably be assigned to him by the Company’s Chief Executive Officer. Executive will devote substantially his full business efforts and time to the performance of Executive’s duties hereunder, provided however, that Executive may serve on outside board positions that are not competitive with the Company subject to the requirement that such service on outside boards of directors does not materially interfere with Executive’s performance of his duties under this Agreement and the Company’s Board of Directors (the “Board”) approves such board membership (which will not be unreasonably withheld). The Company shall indemnify Executive to the same extent as it indemnifies all other officers under Delaware law and in accordance with the Company’s bylaws, as same may be amended from time to time (as a Company officer, such indemnification shall include Executive as a beneficiary of any insurance maintained by the Company pursuant to the Company’s directors and officers liability insurance policies). Executive’s principal place of employment shall be at the Company’s offices located in Santa Monica, California.
2.At-Will Employment. Subject to the terms hereof, Executive’s employment with the Company will be “at-will” employment and may be terminated by Company at any time with or without Cause (as such term is defined in the Change of Control Severance Agreement (“CoC Agreement”) to be entered into concurrently between Executive and the Company) or with or without notice. However, as described in the CoC Agreement, Executive may be entitled to severance benefits depending upon the circumstances of Executive’s termination of employment, subject to the terms and conditions of the CoC Agreement.
3.Term of Agreement. Subject to Section 2, this Agreement will have an initial term of three (3) years, commencing on the Start Date (the “Initial Term”). On the third anniversary of the Start Date, this Agreement will renew automatically for additional one (1) year terms (each an “Additional Term”), unless either party provides the other party with written notice of non-renewal at least ninety (90) days prior to the date of automatic renewal. Notwithstanding the foregoing provisions of this paragraph, (a) if a Change of Control (as defined in the CoC Agreement) occurs when there are fewer than twelve (12) months remaining during the Initial Term or an Additional Term, the term of this Agreement will extend automatically through the date that is twelve (12) months following the effective date of the Change of Control, or (b) if an initial occurrence of an act or omission by the Company constituting the grounds for “Good Reason” as defined in and in accordance with Section 6(g) of the CoC Agreement has occurred (the “Initial Grounds”), and the expiration date of the Company cure period (as such term is used in Section 6(g) of the CoC Agreement) with respect to such Initial Grounds could occur following the expiration of the Initial Term or an Additional Term, the term of this Agreement will extend automatically through the date that is thirty (30) days following the expiration of such cure period. If Executive becomes entitled to benefits under Section 3 of the CoC Agreement during the term of this Agreement, this Agreement will not terminate until all of the obligations of the parties hereto with respect to this Agreement have been satisfied.
4.Compensation.
(a)Base Salary. Executive shall receive an annual base salary of $425,000 (“Base Salary”) payable in accordance with the Company’s normal payroll practices and be subject to the usual, required withholdings. Executive’s Base Salary will be subject to review and any adjustments will be made based upon the Company’s normal performance review practice.
(b)2016 Bonus. For 2016 only, in lieu of the bonus described in Section 4(c) below, Company will pay to Executive a minimum bonus equal to 70% of his Base Salary, pro-rated based on Executive's Start Date; provided, however, that in the event such bonus would be greater if calculated in accordance with Section 4(c) below, Executive will receive such higher amount on a pro-rated basis (such greater amount, the “2016 Bonus”).
(c)Performance Bonus. Executive will qualify for an annual performance bonus (“Annual Bonus”) with a target level of 70% of Base Salary (“Target Level”) based upon performance criteria as established by the Compensation Committee of the Board (the “Compensation Committee”) and subject to the terms and conditions of the Company’s executive bonus plan for the applicable fiscal year. Any Annual Bonus will be paid as soon as practicable after the Board or the Compensation Committee determines that the Annual Bonus has been earned, but in no event will the Annual Bonus be paid after the later of: (i) the fifteenth (15th) day of the third (3rd) month following the close of the Company’s fiscal year in which the Annual Bonus is earned; or (ii) March 15 following the calendar year in which the Annual Bonus is earned.
(d)Equity Awards.
(i)Stock Options. Subject to approval of the Compensation Committee, within approximately five (5) days following the Start Date, Executive will be granted an option to purchase fifty thousand (50,000) shares of Company common stock (the “Option”) with a per share exercise price equal to the fair market value of a share of Company common stock on such date of grant as determined pursuant to the terms of the Company’s 2010 Equity Incentive Plan (the “Equity Plan”). Subject to accelerated vesting upon certain terminations of employment as set forth in the CoC Agreement, the Option will vest as follows: (i) one fourth (1/4th) of the total number of shares subject to the Option will vest on the one (1) year anniversary of the vesting commencement date and (ii) one forty-eighth (1/48th) of the total number of shares subject to the Option will vest each month thereafter for the next thirty six (36) months, subject to Executive’s continued employment with the Company on each scheduled vesting date. The Option will be subject to the terms and conditions of the Equity Plan and a stock option agreement consistent with the terms of this Agreement by and between Executive and the Company (the “Option Agreement”) both of which documents are incorporated herein by reference.
(ii)Restricted Stock Units. Subject to approval of the Compensation Committee, within approximately five (5) days following the Start Date, Executive will be granted an award of fifty thousand (50,000) restricted stock units (the “Initial RSU Award”) pursuant to the terms of the Equity Plan. Subject to accelerated vesting upon certain terminations of employment as set forth in the CoC Agreement, the Initial RSU Award will vest as follows: one fourth (1/4th) of the total number of shares subject to the Initial RSU Award will vest on each of the first four (4) annual anniversaries of the vesting commencement date, subject to Executive’s continued employment with the Company on each scheduled vesting date. In addition, subject to approval of the Compensation Committee, within approximately five (5) days following the Start Date, Executive will be granted an award of forty thousand (40,000) restricted stock units (the “Supplemental RSU Award”) pursuant to the terms of the Equity Plan. Subject to accelerated vesting upon certain terminations of employment as set forth in the CoC Agreement, the Supplemental RSU Award will vest as follows: one half (1/2) of the shares subject to the Supplemental RSU Award will vest on each of the first two (2) annual anniversaries of the vesting commencement date, subject to Executive’s continued employment with the Company on each scheduled vesting date. The Initial RSU Award and the Supplemental RSU Award each will be subject to the terms and conditions of the Equity Plan and to a restricted stock unit agreement consistent with the terms of this Agreement by and between Executive and the Company, each of which documents are incorporated herein by reference.
(iii)Additional Future Equity Awards. Executive will be eligible to receive awards of stock options, restricted stock units or other equity awards covering shares of Company common stock pursuant to any plans or arrangements the Company may have in effect from time to time, including but not limited to any focal grants. The Board or the Compensation Committee will determine in its discretion whether Executive will be granted any such equity awards and the terms of any such award in accordance with the terms of any applicable plan or arrangement that may be in effect from time to time.
5.Relocation and Related Expenses. In order to assist Executive in the smooth transition from his current home location to the greater Los Angeles region, the Company will provide Executive with the relocation and related benefits described herein.
(a)The Company will provide directly or reimburse Executive for all reasonable and customary moving expenses associated with Executive’s relocation to the greater Los Angeles region, up to a maximum of forty thousand dollars ($40,000) (the “Relocation Expenses”), subject to Executive’s submission of appropriate receipts and invoices.
(b)Relocation Expenses do not include payment of any costs associated with buying or selling a home. Therefore, in order to mitigate Executive’s costs with respect to such expenses, the Company will reimburse any reasonable and customary brokers fees and other directly related costs (excluding taxes) associated with the sale of Executive’s primary residence in the Seattle, Washington area (“Primary Residence”), up to a maximum amount equal to the lesser of: (x) actual fees and costs (excluding taxes) incurred; or (y) the amount by which the price Executive paid to purchase the Primary Residence exceeds the total proceeds received by Executive for the sale of the Primary Residence, net of broker fees and costs (but not taxes) (“Net Home Sale Costs”), subject to Executive’s submission of appropriate receipts and invoices.
(c)The Company understands that Executive’s relocation may take some time to complete. During such time, Executive generally will travel to the Company’s Santa Xxxxxx offices. To assist Executive during this relocation period, until the earlier of (i) the completion of Executive’s relocation to the greater Los Angeles region, or (ii) September 30, 2016, the Company will reimburse Executive for the reasonable costs of flights from his current home location to the greater Los Angeles region, as well as for accommodations in the Los Angeles area during the workweek, in each case, in accordance with the Company’s travel policy (the “Transition Expenses”).
(d)To be reimbursable, Relocation Expenses, Net Home Sale Costs, and Transition Expenses must be incurred, and appropriate receipts and invoices submitted to the Company, no later than December 31, 2016. Relocation Expenses, Net Home Sale Costs and Transition Expenses for which appropriate receipts and have been timely submitted will be reimbursed to Executive as soon as administratively practicable after such submission. In no event will any Relocation Expenses, Net Home Sale Costs or Transition Expenses be reimbursed to Executive later than March 15, 2017. To the extent that any Relocation Expenses, Net Home Sale Costs, and Transition Expenses are taxable to Executive, the Company will make a gross payment in the amount necessary, so that, after taking into account any federal, state, and local income taxes withheld by the Company, the net amount Executive receives, after tax, is equal to the full amount of Relocation Expenses, Net Home Sale Costs, and Transition Expenses incurred by Executive.
6.Other Benefits. Executive shall be entitled to participate in executive benefit plans and programs of the Company, if any, on the same terms and conditions as other similarly-situated employees to the extent that Executive’s position, tenure, salary, age, health and other qualifications make Executive eligible to participate in such plans or programs, subject to the rules and regulations applicable thereto. The Company reserves the right to cancel or change the benefit plans and programs it offers to its employees at any time.
7.Vacations; Holidays, Sick Days. Executive shall be entitled to annual paid vacation, paid holidays, and paid sick leave in accordance with the Company’s applicable policies, which may change from time to time
8.Expenses. The Company will reimburse Executive for standard business expenses pursuant to the Company’s standard policies in effect from time to time. In the event that any expense reimbursements are taxable to Executive, such reimbursements will be made in the time frame specified by Treasury Regulation Section 1.409A-3(i)(1)(iv) unless another time frame that complies with or is exempt from “Section 409A” (as defined below) is specified in the Company’s expense reimbursement policy. Company will reimburse the Executive for reasonable legal fees associated with the review of this Agreement and other related agreements up to a maximum amount of ten thousand dollars ($10,000).
9.Change of Control Agreement. Subject to approval by the Compensation Committee, Executive and the Company will enter into the CoC Agreement in substantially the form presented to Executive concurrently with this Agreement, and such document is incorporated herein by reference.
10.Section 409A. It is the intent of this Agreement to be exempt from or comply with the requirements of Section 409A (as defined below) so that none of the payments and benefits to be provided under this Agreement will be subject to the additional tax imposed under Section 409A, and any ambiguities or ambiguous terms in this Agreement will be interpreted to be so exempt or so comply. In no event will the Company reimburse Executive for any taxes imposed or other costs incurred as a result of Section 409A. The Company and Executive agree to work together in good faith to consider amendments to this Agreement and to take such reasonable actions which are necessary, appropriate or desirable to avoid imposition of any additional tax or income recognition under Section 409A prior to actual payment to Executive. For purposes
of this Agreement, “Section 409A” means Section 409A of the Internal Revenue Code of 1986, as amended, and the final regulations and any guidance promulgated thereunder and any state law equivalent.
11.Proprietary Information and Inventions Agreement. Executive agrees to enter into the Company’s standard Employment, Confidential Information, Invention Assignment, and Arbitration Agreement (the “Confidentiality Agreement”), which agreement is incorporated herein by reference.
12.No Conflict. Executive represents and warrants that his employment by the Company as described herein shall not conflict with and will not be constrained by any prior employment or consulting agreement or relationship.
13.Miscellaneous.
(a)Governing Law. This Agreement will be governed by the laws of the State of California (with the exception of its conflict of law provisions).
(b)Assignment. This Agreement and all rights hereunder shall be binding upon and inure to the benefit of and be enforceable by the parties hereto and their respective personal or legal representatives, executors, administrators, heirs, distributees, devisees, legatees, successors and assigns. This Agreement is personal in nature, and neither of the parties to this Agreement shall, without the written consent of the other, assign or transfer this Agreement or any right or obligation under this Agreement to any other person or entity; except that the Company may assign this Agreement to any of its affiliates or wholly-owned subsidiaries or to any successor-in-interest by virtue of a reorganization, merger or other form of business combination, provided, that such assignment will not relieve the Company of its obligations hereunder. Any attempted assignment, transfer, conveyance or other disposition of Executive’s right to compensation or other benefits will be null and void.
(c)Notices. All notices, requests, demands and other communications called for hereunder will be in writing and will be deemed given (a) on the date of delivery if delivered personally; (b) one (1) day after being sent overnight by a well-established commercial overnight service, or (c) four (4) days after being mailed by registered or certified mail, return receipt requested, prepaid and addressed to the parties or their successors at the following addresses, or at such other addresses as the parties may later designate in writing:
If to the Company:
Attn: General Counsel
Cornerstone OnDemand, Inc.,
0000 Xxxxxxxxxxx Xxxxxxxxx, Xxxxx 000
Xxxxx Xxxxxx, XX 00000
If to Executive:
Attn: Xxxxx X. Xxxxxxxx
Xxxxxxx Xxxxx LLP
0000 Xxxxxxx Xxxx Xxxx, Xxxxx 000
Xxx Xxxxxxx, XX 00000
(d)Acknowledgment. Executive acknowledges that he has had the opportunity to discuss this matter with and obtain advice from his private attorney, has had sufficient time to, and has carefully read and fully understands all the provisions of this Agreement, including that Executive is waiving his right to a jury trial, and is knowingly and voluntarily entering into this Agreement.
(e)Severability. In the event that any provision hereof becomes or is declared by a court of competent jurisdiction to be illegal, unenforceable or void, this Agreement will continue in full force and effect without said provision.
(f)Integration. This Agreement, along with the documents incorporated by reference herein, represents the entire agreement and understanding between the parties as to the subject matter herein and supersedes all prior or contemporaneous agreements whether written or oral. No waiver, alteration, or modification of any of the provisions of this Agreement will be binding unless in writing and signed by the Company and Executive.
(g)Arbitration. Any dispute or controversy arising out of or relating to any interpretation, construction, performance or breach of this agreement or the Confidentiality Agreement, will be settled by arbitration pursuant to the arbitration provisions set forth in the Confidentiality Agreement.
(h)Tax Withholding. All payments made pursuant to this Agreement will be subject to withholding of applicable taxes.
(i)Headings. All captions and section headings used in this Agreement are for convenient reference only and do not form a part of this Agreement.
(j)Counterparts. This Agreement may be executed in counterparts, PDF or facsimile, each an original and each having the same force and effect as an original and shall constitute an effective, binding agreement on the part of each of the undersigned.
IN WITNESS WHEREOF, each of the parties has executed this Agreement, in the case of the Company by its duly authorized officer, as of the day and year first above written.
COMPANY:
Cornerstone OnDemand, Inc.
By: /s/ Xxxx Xxxxxx
Xxxx Xxxxxx, Chief Executive Officer
EXECUTIVE:
/s/ Xxxxx X. Xxxxxx
Xxxxx X. Xxxxxx
[Signature Page to Employment Agreement]
Exhibit A
Form of Employment, Confidential Information, Invention Assignment, and Arbitration Agreement
