Exhibit 10.23

 

GRAPHIC [g296483kii001.jpg]

 

December 7, 2012

 

Michael Herring
Park City, Utah

 

Re:          Employment Offer

 

Dear Michael:

 

On behalf of Pandora Media, Inc. (the “Company”), we are pleased to offer you
the position of Chief Financial Officer. This letter agreement sets forth the
terms and conditions of your employment with the Company (“Agreement”) if you
accept and commence such employment.  Please understand that this offer, if not
accepted, will expire on December 21, 2012.

 

1.             Responsibilities; Duties. You are expected to begin work on
February 1, 2013 (the “Start Date”).  You are required to faithfully and
conscientiously perform your assigned duties and to diligently observe all your
obligations to the Company.  You agree to devote your full business time and
efforts, energy and skill to your employment at the Company, and you agree to
apply all your skill and experience to the performance of your duties and
advancing Company’s interests.  During your employment with the Company, you may
not perform services as an employee or consultant of any other competitive
organization and you will not assist any other person or organization in
competing with the Company or in preparing to engage in competition with the
business or proposed business of the Company. Any other outside relationships
you engage in should be made known to the Company’s General Counsel and CEO in
writing.  You shall comply with and be bound by Company’s operating policies,
procedures, and practices from time to time in effect during your employment.

 

2.             Compensation.  In consideration for rendering services to the
Company during the term of your employment and fulfilling your obligations under
this Agreement, you will be eligible to receive the benefits set forth in this
Agreement.

 

a.           Base Salary.  In this exempt full-time position, you will earn an
annual base salary of $350,000 (prorated for any partial pay period that occurs
during the term of your employment), subject to applicable tax withholdings. 
Your salary will be payable pursuant to the Company’s regular payroll policy.

 

b.           Business Expenses.  The Company shall, upon submission and approval
of written statements and bills in accordance with the then regular procedures
of the Company, pay or reimburse you for any and all necessary, customary and
usual expenses incurred by you while traveling for or on behalf of the Company,
and any and all other necessary, customary or usual expenses (including
entertainment) incurred by you for or on behalf of the Company in the normal
course of business, as determined to be appropriate by the Company.  It is your
responsibility to review and comply with the Company’s business expense
reimbursement policies.

 

c.           Signing Bonus.  You will receive a special one-time signing bonus
in the amount of $50,000 (the “Sign-on Bonus”), less applicable tax
withholdings, within 30 days following your Start Date.  If your employment
terminates prior to the first anniversary of your Start Date, you agree to repay
the Sign-on Bonus in full and, in furtherance of such repayment agreement,
authorize the Company to deduct the amount of the Sign-on Bonus from any other
amounts that may be due to you; provided that if the Company terminates you
without cause (as defined in the Company’s applicable severance policy) before
such first anniversary, you will not be required to repay the Sign-on Bonus.

 

--------------------------------------------------------------------------------

 

GRAPHIC [g296483kii002.jpg]

 

Additionally, the Company shall pay reasonable and customary expenses for your
relocation from Utah to California. These include moving expenses for you and
your family’s household goods, airfare and lodging expenses for you and your
family and, if necessary, temporary living expenses for you and your family for
up to 6 months. Additional expenses shall be approved in advance by the CEO.

 

d.           Performance Bonus.  Your target bonus under the Company’s bonus
plan for the fiscal year ending January 31, 2014 will be 60% of your base salary
(prorated from your Start Date). The actual bonus amount paid will be determined
in the sole and absolute discretion of the Company’s Compensation Committee. Any
bonus eligibility for future years will be subject to the terms and conditions
of any bonus or incentive compensation plan that the Company adopts at a later
time.  Nothing hereunder shall be construed or interpreted as a guarantee for
you to receive any bonuses or incentive compensation.

 

3.             Employee Benefits.  You will be eligible to participate in any
employee benefit plans or programs maintained or established by the Company
including, but not limited to, paid time off, group health benefits, life
insurance, dental plan, and other benefits made available generally to
employees, subject to eligibility requirements and the applicable terms and
conditions of the plan or program in question and the determination of any
committee administering such plan or program.  To the extent approved by the
Board of Directors or its Compensation Committee from time to time, you will be
eligible for any severance or change in control policy of the Company that is
then applicable to similarly situated U.S. employees. You will be asked to sign
an Indemnification Agreement with the Company and be subject to the terms and
conditions thereof.  You will be an “Eligible Officer” under the Company’s
Executive Severance and Change in Control Policy (“Severance Policy”) and be
subject to the terms and conditions thereof, which include, but are not limited
to, the severance provisions set forth below:

 

a.   Non-change in control severance. If the Eligible Officer is terminated by
reason of an Involuntary Termination (as defined under the Severance Policy) the
Eligible Officer is entitled, subject to the terms of the Severance Policy, to
receive 6 months of salary, health benefits and accelerated vesting of equity
awards, plus a prorated annual bonus for the year of termination and
outplacement services.

 

b.   Change in control severance. If, Eligible Officer is terminated by reason
of a Change of Control Termination (as defined under the Severance Policy) the
Eligible Officer is entitled, subject to the terms of the Severance Policy, to
receive 12 months of salary and health benefits, 100% accelerated vesting of
equity awards and the opportunity to extend the exercise period of certain
options for up to 12 months following termination, plus a prorated annual bonus
for the year of termination and outplacement services.

 

4.             Stock Option.  In connection with the commencement of your
employment, the Company will recommend that the Board of Directors grant you a
stock option (the “Option”) to purchase 1,250,000 shares of the Company’s Common
Stock with an exercise price equal to the fair market value on the date of the
grant.  The Option shares will vest and become exercisable at the rate of 20% of
the total number of shares on the twelve (12) month anniversary of your Vesting
Commencement Date (as defined in the Stock Option Agreement to be executed
between you and the Company, which date will be your Start Date, as defined
below) and 1/60th of the total number of shares each month thereafter on the
monthly anniversary of the Vesting Commencement Date.  Vesting will, of course,
depend on your continued employment with the Company.  The Option will be an
incentive stock option to the maximum extent allowed by the tax code and will be
subject to the terms of the Company’s 2011 Incentive Plan (the “Plan”) and the
Stock Option Agreement between you and the Company, including but not limited to
a “lock-up” provision, repurchase rights and a right of first refusal in favor
of the Company.  You understand that issuing the Option is expressly contingent
on the Board’s approval and the Company’s receipt of a fully executed Stock
Option Agreement and any related

 

GRAPHIC [g296483kii003.jpg]

 

2

--------------------------------------------------------------------------------

 

GRAPHIC [g296483kii002.jpg]

 

documents, as may be requested by the Company; however, the Company shall seek
Board approval for your option grant on the first day of your employment.

 

5.             Other Benefits.  The Company shall reimburse you for the cost of
monthly reserved underground parking near its office.

 

6.             At-Will Employment.  Your employment with the Company will be on
an “at will” basis, meaning that either you or the Company may terminate your
employment at any time without notice and for any reason or no reason, without
further obligation or liability.  Further, your continued employment as well as
your participation in any benefit programs does not assure you of continuing
employment with the Company.  The Company also reserves the right to modify or
amend the terms of your employment, compensation and benefit plans at any time
for any reason.  This policy of at-will employment is the entire agreement as to
the duration of your employment and may only be modified in an express written
agreement signed by the Chief Executive Officer of the Company.

 

7.             Pre-employment Conditions.

 

a.             Confidentiality Agreement.  Your acceptance of this offer and
commencement of employment with the Company is contingent upon the execution,
and delivery to an officer of the Company, of the Company’s Confidential
Information and Invention Assignment Agreement, a copy of which is enclosed for
your review and execution (the “Confidentiality Agreement”), prior to or on your
Start Date.

 

b.             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 no later than your Start Date, or our employment relationship
with you may be terminated.

 

c.             Verification of Information.  This offer of employment is also
contingent upon the successful verification of the information you provided to
the Company during your application process, as well as a general background
check performed by the Company to confirm your suitability for employment.  By
accepting this offer of employment, you warrant that all information provided by
you is true and correct to the best of your knowledge, and you expressly release
all parties from any and all liability for damages that may result from
obtaining, furnishing, collecting or verifying such information, as well as from
the use of or disclosure of such information by the Company or its agents.  You
have a right to review copies of any public records obtained by the Company in
conducting this verification process unless you check the box below.

 

              I hereby waive my right to receive any public records as described
above.

 

8.             No Conflicting Obligations. You understand and agree that by
accepting this offer of employment, you represent to the Company that
performance of your duties to the Company and the terms of this Agreement and
the Confidentiality Agreement will not breach any other agreement (written or
oral) to which you are a party (including without limitation, current or past
employers) and that you have not, and will not during the term of your
employment with the Company, enter into any oral or written agreement which may
result in a conflict of interest or may otherwise be in conflict with any of the
provisions of this Agreement, the Confidentiality Agreement or the Company’s
policies.  You are not to bring with you to the Company, or use or disclose to
any person associated with the Company, any confidential or proprietary
information belonging to any former employer or other person or entity with
respect to which you owe an obligation of confidentiality under any agreement or
otherwise.  The Company does not need and will not use such information.  Also,
we expect you to abide by any obligations to refrain from soliciting any person
employed by or otherwise

 

GRAPHIC [g296483kii003.jpg]

 

3

--------------------------------------------------------------------------------

 

GRAPHIC [g296483kii002.jpg]

 

associated with any former employer and suggest that you refrain from having any
contact with such persons until such time as any non-solicitation obligation
expires.  To the extent that you are bound by any such obligations, you must
inform the Company immediately prior to accepting this Agreement.

 

9.             General Obligations.  As an employee, you will be expected to
adhere to the Company’s standards of professionalism, loyalty, integrity,
honesty, reliability and respect for all.  Please note that the Company is an
equal opportunity employer.  The Company does not permit, and will not tolerate,
the unlawful discrimination or harassment of any employees, consultants, or
related third parties on the basis of sex, race, color, religion, age, national
origin or ancestry, marital status, veteran status, mental or physical
disability or medical condition, sexual orientation, pregnancy, childbirth or
related medical condition, or any other status protected by applicable law.  Any
questions regarding this EEO statement should be directed to Human Resources.

 

10.          Termination Obligations.

 

a.             You agree that all property, including, without limitation, all
equipment, proprietary information, documents, books, records, reports, notes,
contracts, lists, computer disks (and other computer-generated files and data),
and copies thereof, created on any medium and furnished to, obtained by, or
prepared by you in the course of or incident to your employment, belongs to the
Company and shall be returned to the Company promptly upon any termination of
your employment, or sooner if so requested by the Company.

 

b.             Upon your termination of your employment with the Company for any
reason, if applicable, you will resign in writing (or be deemed to have
resigned) from all other offices and directorships then held with the Company or
any affiliate of the Company, unless otherwise agreed with the Company.

 

c.             Following the termination of your employment with the Company for
any reason, you shall fully cooperate with the Company in all matters relating
to the winding up of pending work on behalf of the Company and the orderly
transfer of work to other employees of the Company.  You shall also cooperate in
the defense of any action brought by any third party against the Company.  If
necessary, the Company shall pay you for your time incurred to comply with this
provision at a reasonable per diem or per hour rate as to be determined by the
Company.

 

d.             Following the termination of your employment with the Company for
any reason, you agree that you will not at any time make any statements or
comments (written or oral) to any third party or take any action disparaging the
integrity or reputation of the Company or any of its subsidiaries, employees,
officers, directors, stockholders or affiliates. You also agree that you will
not do or say anything that could disrupt the good morale of the employees of
any of the companies listed above or harm their respective businesses or
reputations of the companies and persons listed above.

 

11.          Miscellaneous Terms.

 

a.             Entire Agreement. This Agreement, together with its Attachment A
(the Confidentiality Agreement), set forth the entire terms of your employment
with the Company (other than the Equity Plan Documents) and supersede any prior
representations or agreements, whether written or oral.

 

b.             Governing Law. This Agreement will be governed by the laws of
California, without regard to its conflict of laws provisions.  This Agreement
may not be modified or amended except by a written agreement, signed by the CEO
(or his authorized representative) of the Company.

 

GRAPHIC [g296483kii003.jpg]

 

4

--------------------------------------------------------------------------------

 

GRAPHIC [g296483kii002.jpg]

 

c.             Counterparts. This Agreement may be executed in one or more
counterparts, each of which shall be deemed an original but all of which shall
together constitute one and the same instrument.

 

d.             Severability. Nothing contained in this Agreement shall be
construed as requiring the commission of any act contrary to law, and wherever
there is any conflict between any provision of this Agreement and any present or
future statute, law, ordinance or regulation contrary to which the parties have
no legal right to contract, the latter shall prevail, but in such event, any
provision of this Agreement thus affected shall be curtailed and limited only to
the extent necessary to bring it within the requirements of the law.  In the
event that any part, article, paragraph or clause of this Agreement shall be
held to be indefinite or invalid, the entire Agreement shall not fail on account
thereof, and the balance of the Agreement shall continue in full force and
effect.

 

e.             Waiver.  Failure or delay of either party to insist upon
compliance with any provision hereof will not operate as, and is not to be
construed as, a waiver or amendment of such provision or the right of the
aggrieved party to insist upon compliance with such provision or to take
remedial steps to recover damages or other relief for noncompliance.  Any
express waiver of any provision of this Agreement will not operate and is not to
be construed as a waiver of any subsequent breach, whether occurring under
similar or dissimilar circumstances.

 

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 Agreement in the space provided below and return it to me,
along with a signed and dated original copy of the Confidentiality Agreement,
prior to the expiration date specified in the opening paragraph of this
Agreement.

 

 

Very truly yours,

 

 

 

PANDORA MEDIA, INC.

 

 

 

 

 

By:

 

 

 

Name:

Joe Kennedy

 

 

Title:

Chief Executive Officer

 

ACCEPTED AND AGREED:

 

I have read this offer and agree to accept employment with Company under the
terms set forth in this Agreement.

 

Michael Herring

 

 

 

 

 

Signature

 

 

 

Date

 

 

GRAPHIC [g296483kii003.jpg]

 

5

--------------------------------------------------------------------------------

 

GRAPHIC [g296483kii002.jpg]

 

Attachment A

 

Confidential Information and Invention Assignment Agreement

 

GRAPHIC [g296483kii003.jpg]

 

6

--------------------------------------------------------------------------------