Exhibit 10.1

 

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EMPLOYMENT AND CONFIDENTIAL INFORMATION AGREEMENT

This Employment Agreement (the “Agreement”) by and between ServiceSource
International, Inc. (“ServiceSource” or the “Company”) and Richard G. Walker
(“Executive”) is effective as of November 12, 2018 (the “Commencement Date”).

1. EMPLOYMENT TERMS AND CONDITIONS.  ServiceSource hereby employs Executive as
ServiceSource’s Chief Financial Officer, and Executive hereby accepts such
employment with ServiceSource, on the terms and conditions described in this
Agreement, effective as of the Commencement Date.

2. DUTIES.

(a)    Responsibilities.  Executive’s shall report to ServiceSource’s Chief
Executive Officer. Executive shall be responsible for and expected to perform
all duties and tasks typical for the Chief Financial Officer of a public
company, and other tasks as directed by the CEO. In addition, Executive shall
remain a member of the Company’s Board of Directors for the remainder of his
current term, and for subsequent terms if nominated by the Nominating &
Corporate Governance Committee and elected by the Company’s stockholders. As an
employee (non-independent) director, Executive shall no longer be eligible for
cash or equity compensation for Executive’s service on the Board of Directors
effective as of the Commencement Date.

(b)    Loyal and Full Time Performance of Duties.  While employed by
ServiceSource, Executive shall not directly or indirectly, engage in any
Competitive Activity. For the purpose of this Agreement, “Competitive Activity”
is any activity which is the same as or directly competitive with a principal
line of business of ServiceSource during Executive’s employment by
ServiceSource. As of the date of this Agreement, Competitive Activities include
the provision of outsourced renewals management, outsourced inside sales, and
outsourced customer success business processes and outcomes.

(c)    ServiceSource Policies.  Executive agrees to abide by ServiceSource’s
rules, regulations, policies and practices, as they may from time to time be
adopted or modified by ServiceSource at its sole discretion, provided Executive
first has been notified of such rules, regulations, policies and practices.
ServiceSource’s written rules, policies, practices and procedures shall be
binding on Executive unless superseded by or in conflict with this Agreement.

3. EMPLOYMENT AT-WILL.  Executive and ServiceSource acknowledge and agree that
during Executive’s employment with ServiceSource the parties intend to strictly
maintain an at-will employment relationship. This means that at any time during
the course of Executive’s employment with ServiceSource, Executive is entitled
to resign with or without cause and with or without advance notice. Similarly,
ServiceSource specifically reserves the same right to terminate Executive’s
employment at any time with or without cause and with or without advance notice.
Nothing in this Agreement or the relationship between the parties now or in the
future may be construed or interpreted to create an employment relationship for
a specific length of time or a right to continued employment. Executive and
ServiceSource understand and agree that only ServiceSource’s Chief Executive
Officer possesses the authority to alter the at-will nature of Executive’s
employment status, and that any such change may be made only by an express
written employment contract signed by ServiceSource’s Chief Executive Officer.
No implied contract concerning any employment-related decision or term or
condition of employment can be established by any other statement, conduct,
policy or practice.

 

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4. CASH COMPENSATION.

(a)    Base Salary and Bonus.  In consideration for the services and covenants
described in this Agreement, ServiceSource agrees to pay Executive an annual
base salary of four hundred thousand dollars ($400,000) paid on ServiceSource’s
normal payroll dates, subject to all applicable withholdings. In addition, for
the 2019 calendar year and subsequent years, Executive will be eligible for
additional potential compensation pursuant to the Corporate Incentive Plan
(“CIP”) equal to 75% of Executive’s annual base salary.

(b)    CIP Details.  The CIP is a discretionary incentive program that
ServiceSource funds based on the achievement of business results and individual
objectives established by ServiceSource and may also be subject to applicable
performance requirements as determined by the Board of Directors or its
Compensation Committee in their sole discretion. As a direct report to the CEO,
Executive will not be eligible to receive H1 (first half) CIP payment, and will
be eligible for only one CIP payment per year. Except as otherwise specifically
provided in this Agreement, Executive must be employed as of the date of the
scheduled CIP payment in order to be eligible to receive the CIP payment.

(c)    Changes to Compensation.  Executive’s annual base salary and potential
annual target CIP bonus amount may be changed from time to time by mutual
agreement of Executive and ServiceSource, and any such mutually-agreed upon
change shall be deemed to supersede and replace this Section 4.

5. EQUITY COMPENSATION.

(a)    Eligibility.  Executive will be eligible to participate in the
ServiceSource International, Inc. 2011 Equity Incentive Plan (the “Equity
Incentive Plan”) and the ServiceSource International, Inc. 2011 Employee Stock
Purchase Plan, subject to the requirements of the applicable plan.

(b)    Initial Restricted Stock Units Grant.  The Company will recommend to the
Board of Directors (or its Compensation Committee) that Executive be granted
three hundred thousand (300,000) restricted stock units (“RSUs”) under the
Equity Incentive Plan. The proposed RSUs will be scheduled to vest as follows:
(i) twenty-five percent (25%) of Executive’s RSUs will vest on the first
anniversary of the Grant Date and (ii) the remaining RSUs will vest in three
equal installments on each of the second, third and fourth anniversary of the
Grant Date (the “Standard Vesting”). Vesting shall be subject to Executive
remaining as a Service Provider (as such term is defined in the Equity Incentive
Plan) through each vesting date, subject to any acceleration of vesting as
provided in this Agreement. Note that the above grant and its terms remain
subject to approval by the Board of Directors (or the Compensation Committee),
and to the terms and conditions of the Equity Incentive Plan and related RSU
agreement, and that any granted shares will be subject to all applicable state
and federal tax and securities laws. The date the equity compensation is
approved by the Board of Directors (or Compensation Committee) is referred to in
this Agreement as the “Grant Date.”

(c)    Initial Stock Option Grant.  The Company will recommend to the Board of
Directors (or its Compensation Committee) that Executive be granted a
nonqualified stock option to purchase up to five hundred thousand (500,000)
shares of ServiceSource’s common stock (a “Share”) under the Equity Incentive
Plan (the “Option”), at an exercise price per share equal to the fair market
value on the Grant Date of a single Share as determined under the Equity
Incentive Plan. The Option will be scheduled to vest as follows: (i) twenty five
percent (25%) of the Shares underlying the Option shall vest on the first
anniversary of the Grant Date and (ii) the remaining seventy five percent (75%)
of the Shares underlying the Option shall vest monthly on a pro rata basis over
the following thirty six (36)

 

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months such that all Options would have vested in full within forty-eight
(48) months after the Grant Date. Vesting shall be subject to Executive
remaining as a Service Provider (as such term is defined in the Equity Incentive
Plan) through each vesting date, subject to any acceleration of vesting as
provided in this Agreement. Note that the above grant and its terms remain
subject to approval by the Board of Directors (or the Compensation Committee),
and to the terms and conditions of the Equity Incentive Plan and a related stock
option agreement, and that any granted shares will be subject to all applicable
state and federal tax and securities laws.

(d)    Eligibility for Annual Grants.  Commencing in 2019, Executive will be
eligible to participate in the executive performance share program, as such
program may be modified, superseded, or replaced by the Compensation Committee
or the Board of Directors. Any applicable performance targets, and Executive’s
performance against such targets, shall be determined by the Board of Directors
in its sole discretion.

(e)    Existing Equity Grants from Board Service.  Executive’s equity
compensation received prior to the Commencement Date in exchange for his service
on the Board of Directors (collectively, the “Board Service Equity Grants”)
shall continue to vest in accordance with their terms.

6. BENEFITS.  As a full-time employee, Executive shall be entitled to all of the
benefits provided to ServiceSource employees, in accordance with any benefit
plan or policy adopted by ServiceSource from time to time during the existence
of this Agreement. Executive’s rights and those of Executive’s dependents under
any such benefit plan or policy shall be governed solely by the terms of such
plan or policy. ServiceSource reserves the right to cancel or change the benefit
plans and policies it offers to its employees at any time. ServiceSource
reserves to itself or its designated administrators exclusive authority and
discretion to determine all issues of eligibility, interpretation and
administration of each such benefit plan or policy.

7. PAID TIME OFF.  Per Company policy, at Executive’s level, Executive will not
accrue paid time off or be required to track or report paid time off. Instead,
time off is left to the mutual agreement of Executive and the CEO.

8. PROPRIETARY AND CONFIDENTIAL INFORMATION (INCLUDING TRADE
SECRETS).  Executive acknowledges that his employment with ServiceSource allows
his access to Proprietary and Confidential Information. Executive understands
that Proprietary and Confidential Information includes customer and applicant
lists, whether written or solely a function of memory, databases, business
files, contracts and all other information used in the day-to-day operation of
ServiceSource that is not known to persons not employed by ServiceSource and
that ServiceSource undertakes efforts to maintain its secrecy. Executive
understands and agrees that the Proprietary and Confidential Information is
confidential information that the law treats as privileged, therefore protecting
an employer from use without consent.

(a)    Definition.  “Proprietary and Confidential Information” is defined as all
information and any idea in whatever form, tangible or intangible, of a
confidential or secret nature that pertains in any manner to the business of
ServiceSource. As used in this Agreement, the term “Confidential Information”
includes any and all non-public information relating to ServiceSource or its
business, operations, financial affairs, performance, assets, pricing and
pricing strategies, technology, research and development, processes, products,
contracts, customers, licensees, sublicensees, suppliers, personnel, plans or
prospects, whether or not in written form and whether or not expressly
designated as confidential, including any such information consisting of or
otherwise relating to trade secrets, know-how, technology (including software
and programs), designs, drawings, photographs, samples, processes, license or
sublicense arrangements, formulae, proposals, product specifications, customer
lists or preferences, referral sources, marketing or sales techniques or plans,
operating manuals, service manuals, financial information or projections, lists
of suppliers or distributors or sources of supply.

 

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Proprietary and Confidential Information includes both information developed by
Executive for ServiceSource and information Executive obtained while in
ServiceSource’s employment. All Proprietary and Confidential Information,
whether created by Executive or other employees, shall remain the property of
ServiceSource.

(b)    Non-Disclosure and Return.  Executive agrees that he will not, under any
circumstances, or at any time, whether as an individual, partnership, or
corporation, or employee, principal, agent, partner or shareholder thereof, in
any way, either directly or indirectly, divulge, disclose, copy, use, divert or
attempt to divulge, disclose, copy, use or divert ServiceSource’s Proprietary
and Confidential Information, except to the extent authorized and necessary to
carry out Executive’s responsibilities during employment with ServiceSource, or
as required by law. Upon termination of Executive’s employment with
ServiceSource, Executive shall immediately return to ServiceSource all property
in Executive’s possession or control that belongs to ServiceSource, including
all property in electronic form and all copies of Proprietary and Confidential
Information.

(c)    Former Employer Information.  Executive agrees that Executive will not,
during Executive’s employment with ServiceSource, improperly use or disclose any
proprietary information or trade secrets of any former or concurrent employer or
other person or entity and that Executive will not bring onto the premises of
ServiceSource any unpublished document or proprietary information belonging to
any such employer, person or entity unless consented to in writing by such
employer, person or entity. Executive represents and warrants to ServiceSource
that Executive is not in breach of any agreement with any former Employer by
accepting employment with ServiceSource.

(d)    Third Party Information.  Executive recognizes that ServiceSource may
have received and in the future may continue to receive from third parties their
confidential or proprietary information as they may so designate, subject to a
duty on ServiceSource’s part to maintain the confidentiality of such information
and to use it only for certain limited purposes. Executive agrees to hold all
such confidential or proprietary information in the strictest confidence and not
to disclose it to any person, firm or corporation or to use it except as
necessary in carrying out Executive’s work for ServiceSource consistent with
ServiceSource’s agreement with such third party.

(e)    Notification to New Employer.  In the event that Executive’s employment
with ServiceSource ends, Executive consents to notification by ServiceSource to
any subsequent employer of Executive’s rights and obligations under this
Agreement.

(f)    No Solicitation of Clients Using Proprietary and Confidential
Information.  Executive acknowledges and agrees that the names, addresses, and
contact information of ServiceSource’s clients and all other confidential
information relating to those clients, have been compiled by ServiceSource at
great expense and represent a real asset of ServiceSource. Executive further
understands and agrees that this information is deemed confidential by
ServiceSource and constitutes trade secrets of ServiceSource. Executive
understands that this information has been and will be provided to Executive in
confidence, and Executive agrees that the sale or unauthorized use or disclosure
of any of ServiceSource’s trade secrets obtained by Executive during employment
with ServiceSource constitutes unfair competition. Executive agrees and promises
not to engage in any unfair competition with ServiceSource. Executive further
agrees not to, directly or indirectly, during or after termination of
employment, make known to any person, firm, or company any Proprietary and
Confidential Information concerning any of the clients of ServiceSource. In
addition, Executive shall

 

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not use any such Proprietary and Confidential Information to solicit, take away,
or attempt to call on, solicit or take away any of the clients of ServiceSource
on whom Executive called or whose accounts Executive had serviced during
employment with ServiceSource, whether on Executive’s own behalf or for any
other person, firm, or ServiceSource.

(g)    No Solicitation of Employees.  Executive understands and acknowledges
that as an employee of ServiceSource he has certain fiduciary duties to
ServiceSource that would be violated by the solicitation and/or encouragement of
ServiceSource employees to leave the employ of ServiceSource. Executive
therefore agrees that he will not, either during his employment or for a period
of one year after his employment has terminated, solicit any of ServiceSource’s
employees for a competing business or otherwise induce or attempt to induce such
employees to terminate employment with ServiceSource, either directly or through
any third parties. Executive agrees that any such solicitation during such
one-year period would constitute unfair competition.

(h)    Assignment of Rights.  All Proprietary and Confidential Information and
all patents, patent rights, copyrights, trade secret rights, trademark rights
and other rights (including intellectual property rights) owned by or otherwise
belonging to ServiceSource anywhere in the world in connection therewith, is and
shall be the sole property of the ServiceSource. Executive hereby assigns to
ServiceSource any and all rights, title and interest Executive may have or
acquire in ServiceSource’s Proprietary and Confidential Information and
ServiceSource’s property.

9. SEVERANCE BENEFITS.

(a)    Termination Without Cause or Resignation for Good Reason.  If
ServiceSource terminates Executive’s employment without Cause or if Executive
resigns for Good Reason (as such terms are defined below) then the following
will apply:

(i) Base Salary Severance.  Executive shall receive nine (9) months of
Executive’s then-current base salary, paid out in the Company’s normal pay cycle
over the nine-month period following termination (the “Severance Period”) and
subject to all applicable withholding requirements. This severance payment will
only be paid so long as Executive does not engage in any Competitive Activity
during the Severance Period.

(ii) CIP Payment.  Executive will be paid for CIP earned while an employee prior
to the termination date and through the period nine (9) months following the
termination date, even if not employed on the pay-out date as required by the
CIP plan. The CIP payment will be paid out per the normal pay cycle in or around
February and will be based on Company achievement per the applicable plan, and
accordingly all such CIP payments shall be treated as “short-term deferrals”
exempt from the requirements of Code Section 409A.

(iii) Equity Acceleration.  Executive’s outstanding equity compensation awards
(with the exception of the Board Service Equity Grants) shall immediately have
vesting accelerated twelve (12) months from the last date of employment.

(iv) COBRA Coverage.  Executive shall be entitled to receive an additional
lump-sum payment (less applicable withholding taxes) equal to the product
obtained by multiplying nine (9) by the amount of the monthly premium that would
be required for the first month of coverage under the Consolidated Omnibus
Budget Reconciliation Act of 1985, as amended and all applicable regulations
(referred to collectively as “COBRA”), with the premium calculated on the
assumption that the Executive in fact elects coverage for himself, and any
eligible spouse and/or dependents of the Executive that were enrolled in the
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Company health plan immediately prior to his last date of employment. Executive
will be eligible for this payment without regard to whether he actually elects
COBRA continuation coverage. Such payments shall be made on the fifty-third
(53rd) day following Executive’s employment termination date.

(b)    Termination Without Cause or Resignation for Good Reason Following a
Change in Control (Equity Acceleration).  If ServiceSource or a successor should
terminate Executive’s employment without Cause or Executive should resign from
his employment for Good Reason, in either case within eighteen (18) months
following a “Change in Control” (as defined below), then in addition to the
benefits set forth above in Section 9(a)(i) (Base Salary Severance),
Section 9(a)(ii) (CIP Payment), and 9(a)(iv) (COBRA payments), all of
Executive’s outstanding equity compensation awards (with the exception of the
Board Service Equity Grants) shall immediately have their vesting accelerated
100%, so as to become fully vested.

(c)    Definitions: For purposes of this Section 9:

(i) “Cause” shall mean the occurrence of any of the following events:
(i) Executive’s commission of any felony or any crime involving fraud or
dishonesty under the laws of the United States or any state thereof;
(ii) Executive’s commission of, or participation in, a fraud or act of
dishonesty against ServiceSource; (iii) Executive’s willful violation of any
contract or agreement between Executive and ServiceSource or any statutory duty
owed to ServiceSource; (iv) Executive’s unauthorized use or disclosure of
Proprietary and Confidential Information; or (v) Executive’s gross misconduct;
and

(ii) “Good Reason” shall mean the occurrence of any one of the following events,
without Executive’s written consent: (1) a material adverse change in
Executive’s job title as offered in this Agreement, including the assignment of
the same job title at the divisional level of any lesser organizational unit
(for the avoidance of doubt, Executive having the same position as offered in
this Agreement for a division or subsidiary of ServiceSource or of the surviving
entity following a Change of Control, rather than having that job title for the
entire surviving parent entity, would be Good Reason); (2) a material adverse
change in Executive’s duties, authorities or job responsibilities that is not
commensurate with the role as offered in this Agreement; (3) a relocation of
Executive’s principal place of employment beyond the metropolitan area of
Denver, Colorado (though frequent travel to ServiceSource’s global locations is
an inherent part of the job); (4) a change in reporting relationship to any
individual other than ServiceSource’s Chief Executive Officer, or (5) any
material reduction in Executive’s base salary, target bonus or aggregate level
of benefits; provided that Executive has notified ServiceSource in writing of
the event described in (1), (2), (3), (4), or (5) above within ninety (90) days
after the occurrence of such event, ServiceSource (or its successor) has within
thirty (30) days thereafter failed to restore Executive to the appropriate job
title, duties, authorities, responsibility, location, reporting relationship,
salary, target commissions or benefits and Executive actually terminates
employment within thirty (30) days following the expiration of ServiceSource’s
thirty (30)-day cure period described above; and

(iii) “Change of Control” shall mean the occurrence of one of the following
events: a sale of all or substantially all of the shares of stock of
ServiceSource; a merger, consolidation or similar transaction involving
ServiceSource following which the persons entitled to elect a majority of the
members of the Board of Directors of ServiceSource immediately before the
transaction are not entitled to elect a majority of the members of the Board of
Directors of ServiceSource or the surviving entity following the transaction; or
a sale of all or substantially all of the assets of ServiceSource. As applied
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Reason standards will all be based from terms in effect immediately prior to the
Change of Control. Notwithstanding the foregoing, a transaction shall not
constitute a Change of Control unless the transaction qualifies as a “change in
control event” within the meaning of Section 409A.

(d)    Release.  Notwithstanding the foregoing, the severance benefits described
in this Section 9 are subject to Executive’s execution and delivery of a binding
general separation and release of claims agreement, which includes language
consistent with Schedule A hereto, and such release shall become effective,
binding and irrevocable in accordance with its terms within fifty-two (52) days
following the termination date. No severance payments or vesting acceleration
under this Agreement shall be paid or provided unless and until the release
becomes effective. Any severance payment to which Executive is entitled that
would otherwise be paid on or prior to the 52nd day following the termination
date shall be withheld and shall instead be paid by ServiceSource in full on the
fifty-third (53rd) day following Executive’s employment termination date or such
later date as is required to avoid the imposition of additional taxes under Code
Section 409A and the regulations and guidance thereunder, and any applicable
state law equivalent (together, “Section 409A”).

(e)    Section 409A Compliance.  Notwithstanding any provision to the contrary
herein, no Deferred Payments (as defined below) that become payable under this
Agreement by reason of Executive’s termination of employment with ServiceSource
(or any successor entity thereto) will be made unless such termination of
employment constitutes a “separation from service” within the meaning of
Section 409A. Further, if Executive is a “specified employee” of ServiceSource
(or any successor entity thereto) within the meaning of Section 409A on the date
of Executive’s termination of employment (other than a termination of employment
due to death), then the Deferred Payments that are payable within the first six
(6) months following Executive’s termination of employment, shall be delayed
until the first payroll date that occurs on or after the date that is six
(6) months and one (1) day after the date of Executive’s termination of
employment, when they shall be paid in full arrears. All subsequent Deferred
Payments, if any, will be paid in accordance with the payment schedule
applicable to each payment or benefit. Notwithstanding anything herein to the
contrary, if Executive dies following Executive’s employment termination but
prior to the six (6) month anniversary of his employment termination, 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 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
this Agreement is intended to constitute a separate payment for purposes of
Section 409A-2(b)(2) of the Treasury Regulations (for avoidance of doubt, the
foregoing shall be interpreted to provide as well that any payments to be made
in installments shall be deemed to be a series of separate payments). For the
purposes of this Agreement, “Deferred Payment” means any severance pay or
benefits to be paid or provided to Executive (or Executive’s estate or
beneficiaries) pursuant to this Agreement and any other severance payments or
separation benefits, that in each case, when considered together, are considered
deferred compensation under Section 409A. The foregoing provisions and all
payments and benefits under this Agreement are intended to be exempt from or
comply with the requirements of Section 409A so that none of the severance
payments and benefits to be provided hereunder will be subject to the additional
tax imposed under Section 409A, and any ambiguities or ambiguous terms herein
will be interpreted to so comply or be exempt. ServiceSource 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 prior to actual
payment to Executive under Section 409A.

 

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(f)    Termination of Employment for Other Reasons.  The above severance
benefits in this Section 9 shall not be paid or provided in the event of the
termination of Executive’s employment due to Executive’s death, disability or
resignation (other than a resignation for Good Reason upon or following a Change
in Control as set forth above), or the termination of his employment by
ServiceSource or its successor for Cause (as defined above). For purposes of
clarity, a termination by reason of Executive’s death or disability shall not be
deemed a termination without “Cause” under this Agreement.

10. SEVERABILITY.  In the event that any provision of this Agreement is
determined by a court of competent jurisdiction to be illegal, invalid or
unenforceable to any extent, such term or provision shall be enforced to the
fullest extent permissible under the law and all remaining terms and provisions
hereof shall continue in full force and effect.

11. MODIFICATION OF AGREEMENT.  This Agreement may be modified only in writing
by mutual agreement of ServiceSource and Executive. Any such writing must
specifically state that it is intended to modify the parties’ Agreement and
state which specific provision or provisions this writing intends to modify.
Such written modification will only be effective if signed by ServiceSource’s
Chief Executive Officer or General Counsel. Any attempt to modify this Agreement
orally, or by a writing signed by any person other than ServiceSource’s Chief
Executive Officer or General Counsel, or by any other means, shall be null and
void. This Agreement is intended to be the final and complete statement of the
parties’ agreement concerning the legal nature of their employment relationship
in any and all disputes arising from that relationship.

12. COMPLETE AND VOLUNTARY AGREEMENT.  This Agreement constitutes the entire
understanding of the parties on the subject covered. The parties expressly
warrant that they have read and fully understand this Agreement; that they have
had the opportunity to consult with legal counsel of their own choosing to have
the terms of this Agreement fully explained to them; that they are not executing
this Agreement in reliance on any promises, representations or inducements other
than those contained herein; and that they are executing this Agreement
voluntarily, free of any duress or coercion.

13. DISPUTE RESOLUTION.  This Agreement shall be governed by Colorado law,
without regard to its principles of conflicts of laws. Any dispute arising from
this Agreement shall be subject to the exclusive jurisdiction of state and
federal courts located in Denver, Colorado, and each party hereby waives any and
all objections to that venue. The prevailing party in any such dispute shall
recover its reasonable attorneys’ fees and costs from the losing party,
including any fees or costs arising from an appeal.

14. SUCCESSORS AND ASSIGNS.  This Agreement will be binding upon Executive’s
heirs, executors, administrators and other legal representatives and will be for
the benefit of ServiceSource, its successors, and its assigns.

15. GOLDEN PARACHUTE BEST AFTER TAX RESULTS.  If any of the payments to
Executive (prior to any reduction, below) provided for in this Agreement,
together with any other payments which Executive has the right to receive from
ServiceSource or any corporation which is a member of an “affiliated group” as
defined in Section 1504(a) of the Internal Revenue Code of 1986, as amended
(“Code”), without regard to Section 1504(b) of the Internal Revenue Code), of
which ServiceSource is a member (the “Payments”) would constitute a “parachute
payment” (as defined in Section 280G(b)(2) of the Code), and if the Safe Harbor
Amount is greater than the Taxed Amount, as determined on a net, after-tax basis
as described below, then the total amount of such Payments shall be reduced to
the Safe Harbor Amount. The “Safe Harbor Amount” is the largest portion of the
Payments that would result in no portion of the Payments being subject to the
excise tax set forth at Section 4999 of the Code (“Excise Tax”). The “Taxed
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(without any reduction, above) notwithstanding that all or some portion of the
Payments may be subject to the Excise Tax. Solely for the purpose of comparing
which of the Safe Harbor Amount and the Taxed Amount is greater, the
determination of each such amount, shall be made on an after-tax basis, taking
into account all applicable federal, state and local employment taxes, income
taxes, and, if applicable, the Excise Tax (all of which shall be computed at the
highest applicable marginal rate regardless of Executive’s actual marginal
rate). If a reduction of the Payments to the Safe Harbor Amount is necessary,
then the reduction shall occur in the following order: reduction of cash
payments; cancellation of accelerated vesting of equity awards the value of
which is not determined under Q&A 24(c) of the 280G Treasury Regulations;
cancellation of accelerated vesting of equity awards the value of which is
determined under Q&A 24(c) of the 280G Treasury Regulations; and reduction of
employee benefits. In the event that acceleration of vesting of a category of
equity awards is to be reduced, such acceleration of vesting shall be cancelled
in the reverse order of the date on which awards of such category would have
vested absent the change in control transaction. If two or more equity awards of
the same category are granted on the same date, and reduction of acceleration is
required under this paragraph, each award will be reduced on a pro-rata basis.
In no event shall Executive have any discretion with respect to the ordering of
payment reductions. ServiceSource and its tax advisors shall make all
determinations and calculations required to be made to effectuate this paragraph
at ServiceSource’s expense.

 

SERVICESOURCE INTERNATIONAL, INC.

   

EXECUTIVE

By:

  /s/ Patricia Elias       /s/ Richard G. Walker Name:  

Patricia Elias

     

Richard G. Walker

Title:  

EVP, General Counsel

     

 

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SCHEDULE A

FORM OF RELEASE

In exchange for the consideration provided by ServiceSource International, Inc.
or its successor (the “Company”) to the undersigned current or former employee
of the Company (the “Employee”) under this Agreement or the employment agreement
between the Company and the Employee, that Employee is not otherwise entitled to
receive, and subject to the Company’s compliance with its post-termination
obligations to Employee, Employee hereby generally and completely releases the
Company and its directors, officers, employees, shareholders, partners, agents,
attorneys, predecessors, successors, parent and subsidiary entities, insurers,
affiliates, and assigns from any and all claims, liabilities and obligations,
both known and unknown, that arise out of or are in any way related to events,
acts, conduct, or omissions occurring prior to my signing this Agreement. This
general release includes: (1) all claims arising out of or in any way related to
Employee’s employment with the Company or the termination of that employment;
(2) all claims related to Employee’s compensation or benefits from the Company,
including salary, bonuses, commissions, vacation pay, expense reimbursements,
severance pay, fringe benefits, stock, stock options, or any other ownership
interests in the Company; (3) all claims for breach of contract, wrongful
termination, and breach of the implied covenant of good faith and fair dealing;
(4) all tort claims, including claims for fraud, defamation, emotional distress,
and discharge in violation of public policy; and (5) all federal, state, and
local statutory claims, including claims for discrimination, harassment,
retaliation, attorneys’ fees, or other claims arising under the federal Civil
Rights Act of 1964 (as amended), the federal Americans with Disabilities Act of
1990, the federal Age Discrimination in Employment Act of 1967 (as amended)
(“ADEA”), the Family and Medical Leave Act; the Employee Retirement Income
Security Act; any state labor code; the Equal Pay Act, of 1963, as amended.
Notwithstanding the above, it is understood and agreed to by the parties that
neither party is waiving rights relative to compliance with those terms of the
Employment Agreement and Company’s Proprietary Confidential Information
Agreement that impose duties on either party upon and following Employee’s
termination of employment.

ADEA Waiver and Release.  Employee acknowledges that Employee knowingly and
voluntarily waives and releases any rights Employee may have under the ADEA, as
amended. Employee also acknowledges that the consideration given for the waiver
and release in the preceding paragraph hereof is in addition to anything of
value to which Employee was already entitled. Employee further acknowledges that
Employee has been advised by this writing, as required by the ADEA, that:
(a) this waiver and release does not apply to any rights or claims that may
arise after the execution date of this Agreement; (b) Employee has been advised
that he has the right to consult with an attorney prior to executing this
Agreement; (c) Employee has been given twenty-one (21) days to consider this
Agreement; (d) Employee has seven (7) days following the execution of this
Agreement by the parties to revoke the Agreement; and (e) this Agreement will
not be effective until the date upon which the revocation period has expired,
which will be the eighth day after this Agreement is executed by Employee,
provided that the Company has also executed this Agreement by that date
(“Effective Date”). The parties acknowledge and agree that revocation by
Employee of the ADEA Waiver and Release is not effective to revoke his waiver or
release of any other claims pursuant to this Agreement.

 

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