Exhibit 10.22

 

August 29, 2012

 

Steven Cakebread
c/o Pandora Media, Inc.

 

Re:                             Transition Agreement

 

Dear Steve:

 

This letter agreement (this “Agreement”) sets forth the arrangement between you
and Pandora Media, Inc. (the “Company”) regarding your transition from the
Company.

 

1.                                      Transition Period.  You have agreed to
remain employed by the Company following the date hereof until December 31, 2012
or such earlier date on which the Company hires and completes the transition to
a new Chief Financial Officer (the “Transition Period”).  During the Transition
Period, you shall continue to receive your current salary and benefits.

 

Your last day of employment with the Company is referred to herein as the
“Separation Date”.  At the end of the Transition Period, in addition to any
amounts due under Section 2 below, you will receive your accrued and unpaid
wages (salary and paid time off) through the Separation Date as required by
applicable law, unreimbursed business expenses (in accordance with usual Company
policies and practice), to the extent not theretofore paid, vested benefits
under the Company’s 401(k) plan as applicable, and, as set forth in your stock
option agreement, your vested stock options will remain exercisable for 30 days
following the Separation Date.

 

Both you and the Company understand and acknowledge that your employment during
the Transition Period is and shall continue to be at-will, meaning that either
you or the Company may terminate such employment at any time for any reason or
no reason, without further obligation or liability, except as set forth in
Section 2 below.

 

2.                                      Separation Benefits.  If on or within 21
calendar days following your Separation Date, you sign, and do not revoke, the
release of claims in the form set forth on Exhibit A hereto (the “Release”), you
will receive the following payments and benefits (the “Separation Benefits”):

 

a.              a cash payment equal to $162,500 (representing 6 months of your
base salary), paid in a lump sum within 10 business days following the effective
date of the Release; provided that if such payment could be made in more than
one taxable year, payment shall be made in the later taxable year;

 

b.              a cash payment equal to the prorated (to the Separation Date)
portion of the amount you would have received under the Company’s Corporate
Incentive Plan for Fiscal Year 2013, based on the Company’s actual performance
as determined by the Company’s Compensation Committee in its discretion on the
same basis as for

 

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the Company’s remaining executive officers at fiscal year-end; provided that you
will be deemed to have satisfied all applicable personal performance
requirements; provided further that such payment shall not exceed your prorated
annual target bonus for the current fiscal year (which, for a Separation Date on
December 31, 2012, would be $119,167), less your mid-year payout, if any, and
shall be paid no later than March 15, 2013;

 

c.               so long as you timely elect (and remain eligible for) health
benefits continuation pursuant to COBRA, payment by the Company of your
applicable premiums (including spouse or family coverage if you had such
coverage on the Separation Date) for such continuation coverage under COBRA
(payable as and when such payments become due) during the period commencing on
the Separation Date and ending on the earlier to occur of (i) six months
following the Separation Date, and (ii) the date on which you and your covered
dependents, if any, become eligible for health insurance coverage through
another employer; provided that the Company may elect to pay a lump sum in cash
equal to six times the monthly premium (as in effect on the Separation Date),
which shall be paid on the same date as the payment pursuant to
clause (a) above;

 

d.              reasonable outplacement and career continuation services by a
firm to be selected by the Company for up to three months following the
Separation Date, if you elect to participate in such services;

 

e.               accelerated vesting by six months of your Company stock options
(for the avoidance of doubt, meaning that 250,000 option shares, which have an
exercise price of $0.71 per share, shall become vested on the effective date of
the Release); and

 

f.                if the Company hires a new Chief Financial Officer and ends
the Transition Period prior to December 31, 2012, and subject to your continued
compliance with the Inventions Agreement (as defined below) during the
Transition Period, the Company shall provide to you the following: (i) a lump
sum payment equal to the amount of salary you would have received if you had
remained employed with the Company from the Separation Date until December 31,
2012, payable on the same date as the lump sum payment under clause (a) above;
(ii) accelerated vesting of your stock options as if your employment had
continued until December 31, 2012 (for avoidance of doubt, in addition to the
six months of accelerated vesting under clause (e) above); (iii) the prorated
portion of your bonus under clause (b) above shall be calculated as if your
Separation Date had been December 31, 2012; and (iv) an additional number of
months of COBRA reimbursements under clause (c) above representing the number of
months (if any) you are not covered by the Company’s health plan from the
Separation Date until December 31, 2012.

 

All amounts referenced in this Section 2 and elsewhere in this Agreement shall
be subject to any required tax withholding by the Company.  All references
herein to

 

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“Separation Date” or “termination of employment” shall mean separation from
service as an employee within the meaning of Section 409A(a)(2)(A)(i) of the
Internal Revenue Code and the regulations thereunder.

 

3.                                      Mutual Non-Disparagement.  Executive and
Company each agree to refrain from any defamation, libel or slander of the
other.  However, nothing in this Agreement shall prohibit Executive, Company or
any director, officer, or agent of the Company from complying with any lawful
subpoena or court order. Executive acknowledges and agrees that the Company will
be required to disclose this Agreement in its public SEC filings.

 

4.                                      Entire Agreement:  This Agreement,
together with the Confidential Information and Invention Assignment Agreement
between you and the Company (the “Inventions Agreement”), the Indemnification
Agreement between you and the Company, the option agreement and plan concerning
your Company stock options, and the terms of any health or medical plans in
which you participate as of the Separation Date constitute the entire agreement
between the parties with respect to the subject matter hereof and thereof and
supersede all prior negotiations and agreements, whether written or oral, with
respect to the termination of your employment and any separation or termination
benefits.

 

5.                                      Miscellaneous.  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 you and an authorized officer of the Company.  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.

 

 

Very truly yours,

 

 

 

PANDORA MEDIA, INC.

 

 

 

 

 

By:

 

 

Name:

 

Title:

 

ACCEPTED AND AGREED:

 

I have read and understand this Transition Agreement, and I hereby agree to the
terms and conditions set forth herein.

 

Steven Cakebread

 

 

 

 

Signature

 

 

Dated:

 

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EXHIBIT A —Release of Claims

 

1.                                      Full Release:  This Release (this
“Release”) is signed in exchange for the benefits described in Section 2 of the
Transition Agreement, dated August     , 2012 (the “Transition Agreement”),
between Steven Cakebread (“Executive”) and Pandora Media, Inc. (the “Company”)
(the “Parties”).  Executive and his successors and assigns release and
absolutely discharge the Company and its subsidiaries and other affiliated
entities, and each of their respective shareholders, directors, employees,
agents, attorneys, legal successors and assigns of and from any and all claims,
actions and causes of action, whether now known or unknown, which Executive now
has, or at any other time had, or shall or may have, against those released
parties arising out of or relating to any matter, cause, fact, thing, act or
omission whatsoever occurring or existing at any time to and including the date
of execution of this Release by Executive, including, but not limited to:

 

(a)                                 claims relating to any letter or agreement
offering Executive employment with the Company, the offer letter between
Executive and the Company dated February 23, 2010, any Company severance plan,
policy or arrangement, the parties’ employment relationship, the termination of
that relationship, and any claims for breach of contract, infliction of
emotional distress, fraud, defamation, personal injury, wrongful discharge or
age, sex, race, national origin, physical or mental disability, medical
condition, sexual orientation or other discrimination, harassment or
retaliation, claims under the federal Americans with Disabilities Act, Title VII
of the federal Civil Rights Act of 1964, as amended, 42 U.S.C. Section 1981, the
federal Fair Labor Standards Act, the California Fair Employment and Housing
Act, the federal Executive Retirement Income Security Act, the federal Worker
Adjustment and Retraining Notification Act, the federal Family and Medical Leave
Act, the National Labor Relations Act, and applicable state statutes preventing
employment discrimination,

 

(b)                                 the Age Discrimination in Employment Act
(subject to Section 3 below); or

 

(c)                                  any other federal, state or local law, all
as they have been or may be amended, and all claims for attorneys’ fees and/or
costs, to the full extent that such claims may be released.

 

This Release does not apply to (i) claims which cannot be released as a matter
of law, (ii) any right or obligation arising under the Transition Agreement, or
(iii) Executive’s eligibility for indemnification in accordance with the
indemnification agreement between Executive and the Company, the Company’s D&O
insurance coverage, or the certificate of incorporation and by-laws of the
Company and/or its subsidiaries.

 

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2.                                      All Claims Waived:  Executive
acknowledges that this Release shall extend to unknown as well as known claims,
and Executive hereby expressly waives the application of any provision of law,
including, without limitation, Section 1542 of the California Civil Code, that
purports to limit the scope of a general release.  Section 1542 of the
California Civil Code provides:

 

A GENERAL RELEASE DOES NOT EXTEND TO CLAIMS WHICH THE CREDITOR DOES NOT KNOW OR
SUSPECT TO EXIST IN HIS OR HER FAVOR AT THE TIME OF EXECUTING THE RELEASE, WHICH
IF KNOWN BY HIM OR HER MUST HAVE MATERIALLY AFFECTED HIS OR HER SETTLEMENT WITH
THE DEBTOR.

 

3.                                      Older Workers Benefit Protection Act: 
In accordance with the Older Workers Benefit Protection Act, Executive
understands and acknowledges that he has been advised to consult an attorney
before signing this Release.  Executive further understands and acknowledges
that he has at least 21 days to sign this Release by dating and signing a copy
of this Release and returning it to the Company, although it may be accepted
before the end of such period.  Executive further understands that, once having
signed this Release, Executive will have an additional 7 days within which to
revoke the Release, by delivering written notice of revocation of the Release to
the Company’s General Counsel.  If Executive revokes such Release during such
7-day period, Executive will not be eligible for any of the payments and
benefits under Section 2 of the Transition Agreement.

 

EXECUTIVE UNDERSTANDS THAT HE IS ENTITLED TO CONSULT WITH, AND HAS CONSULTED
WITH, AN ATTORNEY PRIOR TO SIGNING THIS RELEASE AND THAT HE IS GIVING UP ANY
LEGAL CLAIMS HE HAS AGAINST THE PARTIES RELEASED ABOVE BY SIGNING THIS RELEASE. 
EXECUTIVE IS SIGNING THIS AGREEMENT KNOWINGLY, WILLINGLY AND VOLUNTARILY IN
EXCHANGE FOR THE BENEFITS DESCRIBED IN THE TRANSITION AGREEMENT.

 

 

 

 

Date:

 

Steven Cakebread

 

 

 

 

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