TALEO CORPORATION AMENDMENT TO EMPLOYMENT AGREEMENT
Exhibit 10.31
TALEO
CORPORATION
AMENDMENT
TO EMPLOYMENT AGREEMENT
This
Amendment to the Employment Agreement (the “Amendment”) is made as of December
26, 2008, by and between Taleo Corporation (the “Company”), and Xxxxxxx X.
Xxxxxxxx (“Executive”).
RECITALS
WHEREAS, the
Company and Executive are parties to a Xxxxxxx X. Xxxxxxxx Employment Agreement
dated March 14, 2005 (the “Agreement”); and
WHEREAS, the
Company and Executive desire to amend certain provisions of the Agreement in
order to come into compliance with Section 409A of the Internal Revenue Code
of 1986, as amended (the “Code”), and any final regulations and official
guidance promulgated thereunder (together, “Section 409A”), as set forth
below.
NOW, THEREFORE, BE IT
RESOLVED, the Company and Executive agree that in consideration of the
foregoing and the promises and covenants contained herein, the parties agree as
follows:
AGREEMENT
1.
Severance. Section
6(a) of the Agreement entitled “Termination Without Cause or Resignation for
Good Reason” shall be amended and restated in its entirety to provide as
follows:
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“(a)
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Termination Without
Cause or Resignation for Good Reason. If Executive’s
employment is terminated by the Company without Cause or by Executive for
Good Reason, then, subject to Section 7, Executive will receive: (i) a
lump-sum payment equal to Executive’s then annual Base Salary, paid within
30 days of termination of employment, (ii) reimbursement for any
applicable premiums Executive pays to continue coverage for Executive and
Executive’s eligible dependents under the Company’s health insurance plan
for twelve months after the date of termination, or, if earlier, until
Executive is eligible for similar benefits from another employer (provided
Executive validly elects to continue coverage under applicable law), (iii)
a post-termination exercise period for Executive’s stock options of twelve
(12) months (but in no event later than the expiration of the term of the
applicable stock option), and (iv) immediate vesting of all unvested
Compensatory Equity that would have vested had Executive otherwise
remained an employee for the 12-month period commencing on his termination
date. In the event any accelerated vesting of restricted stock
units, performance shares or performance units occurs pursuant to clause
(iv) of the preceding sentence, the settlement of such awards and issuance
of the underlying shares will be subject to any required six (6) month
delay pursuant to Section 24. Notwithstanding clause (iv)
of this Section 6(a) above, upon a Change of Control, (x) Executive
will receive immediate vesting with respect to 50% of all unvested
Compensatory Equity that are then held by Executive, and (y) if a
termination described in the first sentence of this Section 6(a) occurs
within 60 days before or 18 months following a Change of Control, then,
subject to Section 7, Executive will receive (A) a lump-sum payment equal
to Executive’s annual Base Salary plus 100% of the annual Target Bonus
amount for the year of termination, paid within thirty (30) days of
termination of employment, and (B) immediate vesting with respect to all
unvested Compensatory Equity that are then held by Executive. For purposes
of clause (x) in the preceding sentence, the vesting schedule for
Executive’s remaining unvested Compensatory Equity (determined after
giving effect to clause (x)) shall be automatically proportionately
adjusted on a grant by grant basis. Purely to illustrate the mechanics of
the preceding sentence, if immediately prior to a Change of Control there
were 150 unvested option shares outstanding which were vesting at a rate
of 8 shares each month, and after giving effect to the accelerated vesting
provisions of clause (x) 75 of such option shares become vested
on an accelerated basis, then the 75 remaining unvested option shares
would thereafter vest at a rate of 4 shares per month. Executive’s vested
stock options will remain exercisable in accordance with the terms of the
1999 Stock Plan and the corresponding option agreements and thereafter
will expire to the extent not
exercised.”
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2.
Section 280G
Gross-up. The last sentence of the first paragraph under
Section 6(b), beginning with the words “Any Gross-Up Payment,” shall be amended
and restated to provide as follows:
“Subject
to any six (6) month delay required pursuant to Section 24, any Gross-Up Payment
will be paid to Executive, or for his benefit, within 15 days following receipt
by the Company of the report of the accounting firm described below (or any
determination by the Internal Revenue Service that Excise Taxes are owed, if
earlier). Notwithstanding the foregoing, in no event will any
gross-up payment under this paragraph be paid later than the end of the calendar
year immediately following the calendar year in which Executive remits the
related taxes.”
3.
Release of
Claims. Section 7(a) of the Agreement entitled “Separation
Agreement and Release of Claims” shall be amended and restated in its entirety
to provide as follows:
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“(a)
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Separation Agreement
and Release of Claims. The receipt of any severance
pursuant to this Agreement will be subject to Executive signing and not
revoking a separation agreement and release of claims (the “Release”) in a
form reasonably acceptable to the Company which becomes effective within
sixty (60) days following Executive’s employment termination date or such
earlier date as required by the Release (such deadline, the “Release
Deadline”). The Release will provide (among other things) that
Executive will not disparage the Company, its directors, or its executive
officers for 12 months following the date of termination and the Company
will instruct its officers and directors not to disparage the
Executive. No severance pursuant to this Agreement will be paid
or provided until the Release becomes
effective.”
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4.
Legal and Tax
Expenses. Section 15 of the Agreement entitled “Legal and Tax
Expenses” shall be deleted in its entirety and no longer shall be in
effect.
5.
Integration. The
following sentence shall be added to Section 16 of the Agreement entitled
“Integration,” immediately following the last sentence of Section
16:
“With
respect to equity awards granted on or after the date hereof, the acceleration
of vesting provisions provided herein will apply to such awards except to the
extent otherwise explicitly provided in the applicable equity award
agreement.”
6.
Section
409A. The following paragraphs shall be added as a new Section
24 to the Agreement.
“24.
Section
409A.
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(a)
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Notwithstanding
anything to the contrary in this Agreement, no severance payments or
benefits or gross-up payments payable to Executive, if any, pursuant to
this Agreement that, when considered together with any other severance
payments or separation benefits, is considered deferred compensation under
Section 409A (together, the “Deferred Payments”) will be payable until
Executive has a “separation from service” within the meaning of Section
409A. Similarly, no severance payable to Executive, if any,
pursuant to this Agreement that otherwise would be exempt from Section
409A pursuant to Treasury Regulation Section 1.409A-1(b)(9) will be
payable until Executive has a “separation from service” within the meaning
of Section 409A.
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(b)
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Further,
if Executive is a “specified employee” within the meaning of
Section 409A at the time of Executive’s separation from service
(other than due to death), any Deferred Payments (including but not
limited to issuance of shares under outstanding restricted stock units,
performance shares or performance units, the vesting of which is
accelerated pursuant to this Agreement, if any) that otherwise are payable
within the first six (6) months following Executive’s separation from
service will become payable on the first payroll date that occurs on or
after the date six (6) months and one (1) day following the date of
Executive’s separation from service. All subsequent
Deferred Payments, if any, will be payable in accordance with the payment
schedule applicable to each payment or benefit. Notwithstanding
anything herein to the contrary, in the event of Executive’s death
following Executive’s separation from service but prior to the six (6)
month anniversary of Executive’s separation from service (or any later
delay date), then any payments delayed in accordance with this paragraph
will be payable in a lump sum as soon as administratively practicable
after the date of Executive’s death and all other Deferred Payments will
be payable in accordance with the payment schedule applicable to each
payment or benefit. Each payment and benefit payable under the
Agreement is intended to constitute a separate payment for purposes of
Section 1.409A-2(b)(2) of the Treasury
Regulations.
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(c)
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Any
severance payment that satisfies the requirements of the “short-term
deferral” rule set forth in Section 1.409A-1(b)(4) of the Treasury
Regulations shall not constitute Deferred Payments for purposes of the
Agreement. Any severance payment that qualifies as a payment
made as a result of an involuntary separation from service pursuant to
Section 1.409A-1(b)(9)(iii) of the Treasury Regulations that does not
exceed the Section 409A Limit shall not constitute Deferred Payments
for purposes of the Agreement. For purposes of this subsection
(c), “Section 409A Limit” will mean the lesser of two (2) times: (i)
Executive’s annualized compensation based upon the annual rate of pay paid
to Executive during the Company’s taxable year preceding the Company’s
taxable year of Executive’s separation from service as determined under
Treasury Regulation Section 1.409A-1(b)(9)(iii)(A)(1) and any Internal
Revenue Service guidance issued with respect thereto; or (ii) the
maximum amount that may be taken into account under a qualified plan
pursuant to Section 401(a)(17) of the Code for the year in which
Executive’s employment is
terminated.
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(d)
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The
foregoing provisions are intended to comply with the requirements of
Section 409A so that none of the severance payments and benefits to be
provided under the Agreement will be subject to the additional tax imposed
under Section 409A, and any ambiguities herein will be interpreted to so
comply. Executive and the Company agree to work together in
good faith to consider amendments to the Agreement and to take such
reasonable actions which are necessary, appropriate or desirable to avoid
imposition of any additional tax or income recognition prior to actual
payment to Executive under Section
409A.”
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7.
Full Force and
Effect. To the extent not expressly amended hereby, the
Agreement shall remain in full force and effect.
8.
Entire
Agreement. This Amendment and the Agreement constitute the
full and entire understanding and agreement between the parties with regard to
the subjects hereof and thereof.
9.
Counterparts. This
Amendment may be executed in counterparts, all of which together shall
constitute one instrument, and each of which may be executed by less than all of
the parties to this Amendment.
10. Amendment. Any
provision of this Amendment may be amended, waived or terminated by a written
instrument signed by the Company and Executive.
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11. Governing
Law. This Amendment shall be governed by the laws of the State
of California (with the exception of its conflict of laws
provisions).
(Signature page
follows)
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IN WITNESS WHEREOF, the
undersigned parties have caused this Amendment to be executed as of the date
first set forth above.
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XXXXXXX
X. XXXXXXXX
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TALEO
CORPORATION
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/s/ Xxxxxxx X. Xxxxxxxx
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/s/ Xxxx Xxxxxx
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Signature
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Signature
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Xxxxxxx X. Xxxxxxxx
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Xxxx Xxxxxx
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Print
Name
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Print
Name
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VP, Legal
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Print
Title
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(Signature
page to Amendment to Xxxxxxx X. Xxxxxxxx Employment
Agreement)
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