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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 Michael
P. Gregoire (“Executive”).

RECITALS

WHEREAS, the Company and Executive are parties to a Michael P. Gregoire
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:

 
“(a)
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:

 
“(a)
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.

 
(a)
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.

 
(b)
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)
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.

 
(d)
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.”

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.

MICHAEL P. GREGOIRE
 
TALEO CORPORATION
                 
/s/ Michael P. Gregoire
 
/s/ Josh Faddis
 
Signature
 
Signature
         
Michael P. Gregoire
 
Josh Faddis
 
Print Name
 
Print Name
             
VP, Legal
     
Print Title
 

 

 

(Signature page to Amendment to Michael P. Gregoire Employment Agreement)
 
 
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