Form 10-Q TERADATA CORP /DE/ For: Jun 30
Tweet
Share
E-mail
PERSONAL AND CONFIDENTIAL
May 5, 2020
Stephen McMillan
Dear Steve,
I am very pleased to extend you this offer of employment with Teradata Corporation and its affiliates (“Teradata” or “Company”) as President and Chief Executive Officer, based in San Diego, and reporting to the Teradata Board of Directors (the “Board”), subject to the conditions set forth below.
This letter outlines the key elements of your compensation and related arrangements.
Base Salary: You shall receive a base salary of $800,000 on an annualized basis, less applicable taxes and withholdings, which would be paid on the Company’s normal bi-weekly payroll schedule and subject to change upon mutual agreement.
Management Incentive Plan: You will be eligible to participate in Teradata’s Management Incentive Plan (the “MIP”), a performance-based annual incentive program for executive officers. Under the MIP, the Compensation and Human Resource Committee of the Board (the “Committee”) establishes an annual bonus program based upon financial and/or strategic performance results achieved by Teradata, as well as each eligible employee’s individual performance against their business objectives. Your MIP target incentive opportunity shall equal 125% of your eligible gross base salary, which would bring your total targeted annual incentive compensation opportunity to $1,000,000. The period of your eligibility under the MIP will begin upon your start date of employment. The first plan year of your incentive opportunity will be pro-rated based on the time you are active in the plan year. Incentive awards are subject to discretionary adjustment by the Committee together with the other independent members of the Board as outlined in the MIP and, if earned, are paid in the first calendar quarter following the program year. Historically, annual incentive awards under the MIP have been paid out in cash.
Annual Equity Award (Performance-Based / Restricted Share Units): You will be eligible to participate in Teradata’s annual equity award program for executive officers. Annual awards are typically determined by the Committee together with the other independent members of the Board in the first quarter of each year and are generally compromised of a mixture of performance-based restricted share units (“PBRSUs”) and service-based restricted share units (“RSUs”). The precise nature of the award and vesting schedules will be determined by the Committee together with the other independent members of the Board in its discretion. Your annual equity award for 2020 shall have a target value of $8,500,000 (the “2020 Equity Award”). The actual number of shares for your 2020 Equity Award will be determined by dividing the target value by the preceding 20-day average of Teradata’s common stock prior to, but not including, the date of formal Board approval of your appointment. The 2020 Equity Award shall be effective the first business day following your hire date and allocated 60% to PBRSUs (subject to a three (3)-year performance period commencing January 1, 2020 and achievement of the same goals applicable to other senior executives of Teradata) and 40% to RSUs (vesting in three (3) equal annual installments). The 2020 Equity Award will be governed by the terms and conditions of your PBRSU and RSU equity award agreements, which you will be required to accept in connection with the award. In addition, for avoidance of doubt, Teradata’s standard practice with respect to the settlement of PBRSU awards is to distribute any vested shares earned in connection with such awards promptly after the performance achievement is certified by the Committee in the first quarter following the end of the applicable performance period. Notwithstanding the foregoing, in the event that
Page | 1 of 4
the Company terminates your employment without Cause (as defined in the Teradata 2012 Stock Incentive Plan, as amended (the “Plan”)) and not as a result of your disability or death, or you resign from the Company for Good Reason (as defined below), then you shall be entitled to pro-rated vesting of the PBRSUs and RSUs underlying the 2020 Equity Award, determined under the pro-ration methodology employed by the Company from time-to-time (provided that your years of vesting service for this purpose only shall be no less than 2 years) and, in the case of PBRSUs for which the applicable performance period has not been completed as of the date of termination, subject to actual achievement of the applicable performance goals, as determined by the Committee after the end of the performance period.
“Good Reason” means the occurrence of any of the following events without your prior written consent in the event they are not remedied by the Company within thirty (30) days after receipt of written notice thereof given by you to the Company’s General Counsel: (a) a material reduction in your authority, duties and responsibilities, excluding for this purpose any isolated, insubstantial and inadvertent action not taken in bad faith; (b) any reduction in your annual base salary; (c) the failure to pay annual or long-term incentive compensation to which you are otherwise entitled under the terms and conditions of the applicable Company incentive plan, at the time at which such compensation is otherwise payable in the ordinary course of business or as soon thereafter as administratively feasible; (d) a reduction of five percent (5%) or more in your “target” or “maximum” annual or long-term incentive opportunity (other than any such reduction that is applied across-the-board to senior executives of Teradata); (e) the failure by the Company to continue in effect any equity compensation plan in which you participate, unless a substantially equivalent alternative compensation arrangement (embodied in an ongoing substitute or alternative plan) has been provided to you, or the failure by the Company to continue your participation in any such equity compensation plan on substantially the same basis, in terms of the level of your participation relative to other participants, excluding for this purpose any isolated, insubstantial and inadvertent action not taken in bad faith; or (f) except as required by law, the failure by the Company to continue to provide to you employee benefits substantially equivalent, in the aggregate, to those enjoyed by you under the qualified and nonqualified employee benefit and welfare plans of the Company, including, without limitation, the life insurance, medical, dental, health and accident, disability retirement, and savings plans, other than a reduction of such benefits, in the aggregate, of less than 5% of aggregate value of such benefits.
New Hire Grant Restricted Stock Unit Award: Teradata shall award you a one-time grant of service-based RSUs (the “New Hire Grant”) with a target value of $4,662,327, which is equal to the product of (i) the number of share units that you will forfeit upon resignation from your current employer, which we agree equals 36,096 share units, and (ii) the preceding 20-day average of your current employer’s common stock prior to, but not including, the date of formal Board approval of your appointment (the “Target Value”). The actual number of RSUs for your New Hire Grant will be determined by dividing the Target Value by the preceding 20-day average of Teradata’s common stock prior to, but not including, the date of formal Board approval of your appointment. The New Hire Grant will be effective the first business day following your hire date and vest as follows: (i) 45% of the RSUs on December 1, 2020, (ii) 42% of the RSUs on the first anniversary of the date of grant, and (iii) the remaining RSUs (i.e., 13% of the RSUs) on the second anniversary of the date of grant, in each case subject to your continued employment with Teradata and subject to the other terms and conditions set forth in the applicable equity award agreement. Notwithstanding the foregoing, in the event that the Company terminates your employment without Cause (as defined in the Plan) and not as a result of your disability or death, or you resign from the Company for Good Reason (as defined above), then any unvested portion of the New Hire Grant shall vest in full.
Cash Signing Bonus: You will receive a one-time cash signing bonus in the amount of $500,000, minus applicable taxes and withholdings, which shall be payable to you in the first payroll cycle after you have completed thirty (30) days of continuous and satisfactory employment with Teradata.
If, after receipt of your signing bonus, your employment is terminated for Cause (as defined in the Plan) or if you terminate your employment for any reason other than Good Reason (as defined above) within twelve (12) months of your first day of employment with Teradata, you agree to repay $250,000 (net of taxes) of the signing bonus, and Teradata may withhold these sums from any compensation otherwise due to you. If your employment is terminated for Cause (as defined in the Plan) or if you terminate your employment for any reason other than Good Reason (as defined above) between twelve (12) and twenty-four (24) months of your first day of employment with
Page | 2 of 4
Teradata, you agree to repay $125,000 (net of taxes) of the signing bonus, and Teradata may withhold these sums from any compensation otherwise due to you.
Stock Ownership Guidelines: The Chief Executive Officer position is subject to Teradata's Stock Ownership Guidelines holding requirement as established by the Committee, currently, 6x annual base pay for the CEO, which are subject to change from time to time at the Committee’s discretion.
Executive Severance Plan and Change in Control Plan: You shall participate as a Level I participant in the Teradata Executive Severance Plan (the “ESP”) and shall participate under the Teradata Change in Control Severance Plan (the “CIC Plan”). You shall be designated by the Committee as an eligible participant in both plans effective upon your start date of employment with Teradata; however, each plan is subject to amendment or termination by Teradata in accordance with the terms of each plan, and your participation in the ESP is subject to your signing a participation agreement under the ESP. A copy of each plan, as well as the participation agreement for the ESP reflective of the provisions of this offer letter, will be provided to you under separate cover.
Your participation agreement under the ESP shall provide that (i) a Qualified Termination (as defined in the ESP) includes termination of your employment by you for Good Reason (as defined above) at any time (and not just in connection with a change in control), and (ii) upon a Qualified Termination (as defined in the ESP and as modified by the foregoing clause (i)), in addition to any applicable vesting provided for under Section 4(b)(v) of the ESP or the applicable award agreement, and subject to the terms and conditions of the ESP, with respect to any outstanding but unvested PBRSUs or RSUs, (a) you will be treated as having attained age 55 at the time of your termination of employment for purposes of determining the vesting of such awards under Section 4(b)(v) of the ESP, and (b) the additional year of vesting credit provided under Section 4(b)(v)(ii) of the ESP for purposes of calculating the vesting of RSU awards shall also be provided to you for purposes of determining the vesting of PBRSU awards, provided that payout of any such PBRSUs shall be subject to actual performance results as determined by the Committee after the end of the applicable performance period.
Travel Allowance: Because your principal place of employment will be Teradata’s office in San Diego, California when you are not otherwise traveling for business, subject to Committee approval, you will be eligible to commute to San Diego to perform your duties hereunder. You shall receive a gross monthly allowance of $15,000 to cover these commuting costs, such as the cost of airfare, lodging and a rental car or ride services (the “Allowance”). The Allowance shall be treated as taxable compensation to you but shall not be considered a part of your normal or expected compensation for purposes of calculating severance payments, bonuses, long-service awards or retirement benefits or similar payments. The Company shall have no other obligation to reimburse you for any costs related to your commuting expenses, nor will it assume any liability for lease agreements should you wish to lease an apartment. The Allowance may be revisited by the Committee on an annual basis.
Travel: Any business-related travel will be reimbursed as a Company business expense. Such expenses include the cost of airfare, lodging, and a rental car or ride services. Travel expenses will be reimbursed upon receipt, in accordance with the Company’s Travel and Expense Policy. In addition, in connection with any business travel for the Company and your commute to San Diego, notwithstanding anything to the contrary in the Company’s Travel and Expense Policy, you will be permitted to fly business or first class for flights of any duration whether internationally or domestically.
Tax Matters: Notwithstanding any other provision of your offer letter, Teradata may withhold from any amounts payable hereunder, or any other benefits received pursuant hereto, such minimum federal, state and/or local taxes as shall be required to be withheld under any applicable law or regulation.
Benefits: As an employee of the Company, you will be eligible to participate in the standard benefit plans offered to similarly situated employees by Teradata, subject to plan terms and generally applicable company policies. A full description of these benefits is available for your review. Teradata may change its benefit programs from time to time in its discretion; provided; however, that your prior consent will be required in the event that the Company material reduces your aggregate benefit levels unless such changes are required by applicable law.
Indemnification and D&O Coverage: The Company shall indemnify you to the full extent provided for in its corporate certificate of incorporation, bylaws or any other indemnification policy or procedure as in effect from time to time and applicable to its other directors and officers and to the maximum extent that the Company
Page | 3 of 4
indemnifies any of its other directors and officers, and you will be entitled to the protection of the insurance policies the Company maintains generally for the benefit of its directors and officers against all costs, charges, liabilities and expenses incurred or sustained by you in connection with any action, suit or proceeding to which you may be made a party by reason of you being or having been a director, officer or employee of the Company or any of its affiliates or you serving or having served any other enterprise, plan or trust as a director, officer, employee or fiduciary at the request of the Company or any of its affiliates (other than any dispute, claim or controversy arising under or relating to this letter) pursuant to the terms and conditions of such policies.
Board Service: The Board shall elect you as a director of Teradata upon commencement of your employment. During your service as Chief Executive Officer of Teradata, the Company shall cause the Committee on Directors and Governance of the Board (the “Governance Committee”) to nominate you to serve as a member of the Board each year that your term of Board service is to be slated for reelection to the Board. If the Company’s stockholders vote in favor of the Governance Committee’s nomination for you to serve as a member of the Board, you agree to serve in such capacity. Any service on the Board shall be without additional compensation. Notwithstanding the foregoing, upon the termination of your service as Chief Executive Officer (whether voluntarily or involuntarily or as a result of resignation or removal), you shall immediately resign from all positions that you hold or have ever held with the Company and its affiliates, including your position on the Board. You agree to execute any and all documentation to effectuate such resignations upon request by the Company but shall be treated for all purposes as having so resigned upon removal or resignation as Chief Executive Officer, regardless of when or whether you execute any such documentation.
Legal Fee Reimbursement: The Company agrees to reimburse you for reasonable attorney’s fees associated with legal review of this letter in an amount up to $10,000, upon receipt of invoice(s) for such fees.
By accepting an offer of at-will employment, you must agree to the Conditions of Employment outlined in Attachment A, including but not limited to the restriction of disclosure of any trade secret or confidential/proprietary information during your employment at Teradata, satisfactory outcome of background and reference checks, and proof of identity and legal authorization to work.
Upon commencement of your employment, this letter, together with Attachment A and your Employee Confidential Information and Inventions Assignment Agreement, forms the complete and exclusive statement of your employment agreement with Teradata. It will supersede any other agreements or promises made to you by anyone, whether oral or written. Changes in your employment terms, other than those changes expressly reserved to Teradata’s discretion in this letter, require a written modification signed by you and an officer of Teradata.
Steve, we are excited to provide this offer and look forward to the contributions you will bring to the Teradata team and we know that you share this enthusiasm. The offer assumes a start date of June 8, 2020, unless otherwise mutually agreed.
If you have any questions regarding the details set forth above, please do not hesitate to contact me.
Sincerely,
TERADATA CORPORATION
By:_____________________________________
Michael P. Gianoni, Chairman
ACCEPTANCE:
I accept the offer of employment by Teradata Corporation on the terms described in this letter.
_____________________________________
Page | 4 of 4
Stephen McMillan
Date:________________________________
Page | 5 of 4
ATTACHMENT A
CONDITIONS OF EMPLOYMENT
Teradata requires employment candidates to successfully complete various employment documentation and processes. This offer of employment is conditioned upon your satisfying and agreeing to the criteria outlined below. You agree to assist as needed and to complete any documentation at the Company’s request to meet these conditions. You assume any and all risks associated with terminating any prior or current employment or making any financial or personal commitments based upon Teradata’s conditional offer.
Pre-employment Background and Reference Checks: This offer of employment is conditioned upon successful completion of a background and reference checks. By accepting this offer and these conditions you will agree to provide Teradata permission to conduct both of these checks and release the results to Teradata designated officials. Following acceptance of the offer you will receive an e-mail with the subject Action Required to Complete Background Check for Teradata Employment with a link to initiate the background check process. Please submit your information within three days of receipt of the link.
U.S. Employment Eligibility. As required by federal law, you must provide satisfactory proof of your right to work in the United States. You will be required to complete an I-9 form and submit acceptable documentation (as noted in the I-9 form) verifying your identity and work authorization within three (3) days of your employment start date.
Confidential Information. You must read, execute, and agree to abide by Teradata’s Employee Confidential Information and Invention Assignment Agreement, which prohibits unauthorized use or disclose of Teradata’s proprietary information, among other obligations.
Mutual Agreement to Arbitrate. You must read, execute, and agree to abide by Teradata’s Mutual Agreement to Arbitrate all Employment Related Claims, which provides for final and binding arbitration of any unresolved employment-related disputes that may arise between you and Teradata.
Code of Conduct & Conflicts of Interest Certifications. You agree to read and abide by Teradata’s Code of Conduct and to disclose in writing all actual and potential conflicts of interest which pertain to you. Teradata’s Code of Conduct, which includes the contact information for Teradata’s Ethics Helpline, will be provided to you on your first day of employment, and can also be accessed here: https://assets.teradata.com/pdf/Code-of-Conduct.pdf. You will be required to take Teradata’s Code of Conduct training and certify in writing your commitment to reading and complying with the Code of Conduct and disclosing all conflicts in interest no later than thirty (30) days after your employment start date. An email with a link to the training will be sent you on or shortly after your start date of employment.
No Employment Restrictions. By accepting and signing this document, you certify to Teradata that you are not subject to any restrictions by virtue of any prior employment which would preclude or restrict you from performing the position being offered in this letter, such as non-competition, non-solicitation, or other work-related restrictions. This offer is further conditioned upon Teradata confirming that there are no export restrictions applicable to your employment
No Improper Use of Information of Prior Employers and Others. Teradata respects the intellectual property rights of other companies. You should not bring with you to your Teradata position any confidential information, including trade secrets, of any former employer or other person to whom you have an obligation of confidentiality, nor in any other way disclose or use such information while employed by Teradata. Rather, you will be expected to use only that information which is generally known and used by persons with training and experience comparable to your own, which is common knowledge in the industry or otherwise legally in the public domain, or which is otherwise provided or developed by Teradata. Your managers and colleagues will be instructed to not accept any such confidential information of another company, and you will be subject to discipline up to and including termination of employment for disclosure of such information.
Employment At Will. This document reflects the general description of the terms and conditions of your employment with Teradata. Teradata has in place other policies which govern your employment relationship with Teradata, which it may change from time to time in its discretion. Your offer letter, this attachment, and these policies are not a contract of employment for any definite duration of time. Your employment at Teradata will be “at-will”, meaning either you or Teradata have the right to discontinue the employment relationship with or without cause at any time and for any reason whatsoever. Your employment at-will status can only be modified in a written agreement signed by you and by an officer of Teradata.
EXECUTIVE SEVERANCE PLAN
PARTICIPATION AGREEMENT
June ___, 2020
Dear Stephen McMillan:
You have been selected to participate in the Teradata Executive Severance Plan (the “Plan”), subject to your execution and return of this agreement (this “Participation Agreement”) to Teradata Corporation (the “Company”). The Plan has been adopted by the Company effective as of February 1, 2017, and capitalized terms used without definition in this Participation Agreement have the meaning given to such terms in the Plan.
You have been designated as an Eligible Employee who is eligible to participate in the Plan as a Level I Participant, subject to the terms and conditions of the Plan and this Participation Agreement.
By signing below, the Company and you agree that the Plan shall be modified as set forth below with respect to your participation therein:
1. Section 2 of the Plan is amended by deleting the definition of “Good Reason” contained therein and replacing it with the following:
“Good Reason” means the occurrence of any of the following events without the Participant’s prior written consent in the event they are not remedied by the Company within thirty (30) days after receipt of written notice thereof given by the Participant to the Company’s General Counsel: (a) a material reduction in the Participant’s authority, duties and responsibilities, excluding for this purpose any isolated, insubstantial and inadvertent action not taken in bad faith; (b) any reduction in the Participant’s annual base salary; (c) the failure to pay annual or long-term incentive compensation to which the Participant is otherwise entitled under the terms and conditions of the applicable Company incentive plan, at the time at which such compensation is otherwise payable in the ordinary course of business or as soon thereafter as administratively feasible; (d) a reduction of five percent (5%) or more in the Participant’s “target” or “maximum” annual or long-term incentive opportunity (other than any such reduction that is applied across-the-board to senior executives of the Company); (e) the failure by the Company to continue in effect any equity compensation plan in which the Participant participates, unless a substantially equivalent alternative compensation arrangement (embodied in an ongoing substitute or alternative plan) has been provided to the Participant, or the failure by the Company to continue the Participant’s participation in any such equity compensation plan on substantially the same basis, in terms of the level of the Participant’s participation relative to other participants, excluding for this purpose any isolated, insubstantial and inadvertent action not taken in bad faith; or (f) except as required by law, the failure by the Company to continue to provide to the Participant employee benefits substantially equivalent, in the aggregate, to those enjoyed by the Participant under the qualified and nonqualified employee benefit and welfare plans of the Company, including, without limitation, the life insurance, medical, dental, health and accident, disability retirement, and savings plans, other than a reduction of such benefits, in the aggregate, of less than 5% of aggregate value of such benefits.
2. Section 2 of the Plan is amended by deleting the definition of “Qualified Termination” contained therein and replacing it with the following:
“Qualified Termination” means the termination of a Participant’s employment with the Company and its Affiliates (a) by the Company without Cause and not as a result of the Participant’s disability or death; or (b) by the Participant for Good Reason.
3. Section 4(b) of the Plan is amended by deleting Section 4(b)(v) thereof and replacing it with the following:
(v) Equity Awards. Each outstanding equity award of the Company granted to the Participant shall be treated as provided in the applicable Company equity plan and award agreement; provided, however, that, unless the applicable equity plan and award agreement would provide a greater benefit, (i) the Participant shall be entitled to pro-rated vesting of all outstanding service-based and performance-based restricted share unit awards granted by the Company, determined under the pro-ration methodology employed by the Company from time-to-time and, in the case of any performance-based restricted share unit awards for which the applicable performance period has not been completed as of the Date of Termination, subject to actual achievement of the applicable performance goals, as determined by the Committee after the end of the applicable performance period; and (ii) for any equity awards granted after December 31, 2020, the Participant shall receive an extra year of vesting credit for purposes of calculating the vesting of the Participant’s outstanding service-based and performance-based restricted share units and stock options granted by the Company and, in the case of any performance-based restricted share unit awards for which the applicable performance period has not been completed as of the Date of Termination, subject to actual achievement of the applicable performance goals, as determined by the Committee after the end of the applicable performance period.
4. Section 7(f) of the Plan is amended by adding the following sentence to the end thereof:
The Participant shall be reimbursed, in accordance with the Company’s Travel and Expense Policy, for all reasonable out of pocket expenses incurred by the Participant in connection with his compliance with this Section 7(f).
5. Paragraph 4 of the Release attached to the Plan as Exhibit C is amended by adding the following language to the end thereof:
However, this Release excludes, and I hereby do not waive, release, or discharge: (A) any obligation of Teradata under the Plan; (B) claims that cannot be waived by law, such as claims for unemployment benefit rights and workers’ compensation; (C) indemnification rights that I have against Teradata under applicable corporate law, the by-laws or certificate of incorporation of Teradata, or as an insured under any director’s and officer’s liability insurance policy now or previously in force; and (D) any rights to accrued and vested benefits through the date of termination, such as vested retirement benefits, vested but unpaid equity other incentive awards, or accrued but unpaid salary, the rights to which shall be governed by the terms of the applicable plan, arrangement or agreement.
By signing this Participation Agreement, you hereby acknowledge and agree as follows: (a) that you have read the Plan, including, but not limited to, the provisions contained in Section 7 of the Plan entitled “Restrictive Covenants” as amended by this Participation Agreement (the “Restrictive Covenants”); (b) that the Restrictive Covenants are intended to encourage conduct that protects the legitimate business interests of the Company and its subsidiaries and affiliates, including but not limited to protection of Teradata’s Trade Secret Information; (c) that, as a condition to and in consideration of receiving the benefits set forth in the Plan, you hereby agree to be bound by and to comply with the terms and conditions of the Restrictive Covenants; and (d) that you will notify the Company in writing if you have, or reasonably should have, any questions regarding the applicability of the Restrictive Covenants. You further acknowledge that by signing this Participation Agreement, you have thereby
willingly agreed to comply with the Restrictive Covenants, and that that you were free to reject this Participation Agreement and all benefits under the Plan with no adverse consequences to your employment with the Company and its Affiliates.
Note that the agreements you make by executing this Participation Agreement will be enforceable against you, regardless of whether or not your employment terminates in circumstances that entitle you to severance benefits under the Plan.
Please note that you are not required to participate in the Plan and may decline participation in the Plan by not returning this Participation Agreement. If you want to accept participation in the Plan, you must execute this Participation Agreement and see that it is returned to the Company’s [TITLE][NAME], via email at [EMAIL] or via mail at 17095 Via del Campo, San Diego, CA 92127 so that it is received no later than ____________, 2020. This Participation Agreement may be executed in separate counterparts, each of which is deemed to be an original and all of which taken together constitute one and the same agreement.
TERADATA CORPORATION | ACCEPTED AND AGREED BY PARTICIPANT – STEPHEN MCMILLAN | ||||
| By: | Signed:_______________________________ | ||||
Title: | Dated:________________________________ | ||||
CONSULTING SERVICES AGREEMENT
THIS CONSULTING SERVICES AGREEMENT (this "Agreement") is made and entered into effective as of June 8, 2020 (the “Effective Date”), by and between Victor L. Lund ("Consultant"), and Teradata Corporation and its affiliates ("Teradata" or the “Company”). Consultant and Teradata are referred to herein as the “Parties”.
WHEREAS, Consultant was appointed Interim President and Chief Executive Officer (“CEO”) of Teradata on November 5, 2019, and served as Executive Chairman of the Board of the Company and its President and CEO prior to such time, and accordingly has deep knowledge and executive expertise concerning the business and strategy of Teradata;
WHEREAS, on May 5, 2020, the Board of Directors of Teradata (“Board”) appointed a new President and CEO as of the Effective Date, and in connection with such appointment, at the Board’s request, Consultant agreed to resign as an employee and step down as Interim President and CEO and a director of the Board as of the Effective Date;
WHEREAS, the Company can benefit from Consultant’s considerable executive management experience and expertise and familiarity with Teradata’s business and strategy; and
WHEREAS, in connection with the transition to a new CEO, the Company desires to retain Consultant to provide certain executive management consulting services through the completion of the current fiscal year, and Consultant has agreed to perform such services, in accordance with the terms, and subject to the conditions, of this Agreement.
NOW THEREFORE, in consideration of the mutual covenants and agreements contained herein, the Parties hereby agree as follows:
1. Engagement. Teradata hereby engages Consultant, and Consultant agrees to provide, certain executive management consulting services, in accordance with the terms, and subject to the conditions, of this Agreement.
2. Consulting Period. During the period commencing on the Effective Date and ending on December 31, 2020, unless terminated prior thereto pursuant to this Section 2 or Section 10 herein (the "Consulting Period"), Consultant shall, at Teradata's request, provide consulting services to Teradata, as set forth in Section 3 below. The Consulting Period automatically terminates upon the death of Consultant or the incurrence of a disability that prevents the Consultant from providing the consulting services sought by Teradata.
3. Services To Be Provided. Consultant shall consult with and advise the Chief Executive Officer of the Company, with respect to the matters set forth on Exhibit A (the “Consulting Services”). Consultant will make reasonable efforts to be available to provide the Consulting Services upon reasonable advance notice as requested.
4. Non-Exclusive Relationship. The Consulting Services being provided by Consultant are on a non-exclusive basis, and Consultant shall be entitled to perform or engage in
any activity not prohibited by or otherwise inconsistent with this Agreement or in violation of the Company’s policies including, without limitation, its conflict of interest policy, so long as such activities (individually or in the aggregate) do not significantly interfere with the performance of Consultant’s responsibilities as set forth in Section 3 of this Agreement. Moreover, Teradata shall be permitted to engage any other individual or firm as a consultant or other advisor during the Consulting Period.
5. Compensation. During the Consulting Period, Teradata shall pay Consultant a fee equal to $83,333.33 per month for Consulting Services to be performed by Consultant (the "Consulting Fee"). Teradata shall pay Consultant the Consulting Fee for such services in advance on a monthly basis.
6. Performance of Services. Consultant shall make himself available (by telephone or otherwise) at reasonable times during normal business hours and on reasonable notice to provide the Consulting Services. Any business-related travel will be reimbursed as a Company business expense. Such expenses include the cost of airfare, lodging, and a rental car or ride services. Travel expenses will be reimbursed upon receipt, in accordance with the Company’s Travel and Expense Policy. Specific access by the Consultant to network applications utilized by Teradata will be agreed upon on a case-by-case basis.
7. Duties of Consultant. Subject to Section 3 and Section 9 of this Agreement, Consultant shall (a) dedicate such time commitment to the Consulting Services as is reasonably necessary to perform such Consulting Services, (b) comply with all applicable federal, state and municipal laws and regulations required to enable Consultant to render to Teradata the Consulting Services called for herein; and (c) upon termination of the Consulting Period, return to Teradata any Teradata property in Consultant's possession.
8. Independent Consultant Status. In performing the Consulting Services herein, Teradata and Consultant agree that Consultant shall at all times be acting solely as an independent contractor and not as an employee of Teradata. The Parties acknowledge that Consultant was, prior to the Effective Date, an employee of Teradata, serving as Interim President and Chief Executive Officer, but that such employment relationship has terminated in a manner that constitutes a "separation from service" within the meaning of Section 409A of the Internal Revenue Code of 1986, as amended (the "Code"). Teradata and Consultant agree that Consultant will not be an employee of Teradata during the Consulting Period in any matter under any circumstances or for any purposes whatsoever, and that Consultant and not Teradata shall have the authority to direct and control Consultant's performance of his activities hereunder. Throughout the Consulting Period, the Company shall retain all authority and control over the business, policies, operations and assets of the Company and its affiliates. The Company does not, by virtue of the Agreement, delegate to Consultant any of the powers, duties or responsibilities vested in the Company or its affiliates by law or under the organizational documents of the Company or its affiliates. As an independent contractor, Consultant is not eligible for and will not be provided any benefits that the Company provides to its employees, including without limitation any severance, pension, retirement, health or welfare, or any kind of insurance benefits, including workers compensation insurance. Teradata shall not pay, on the
647215.1 2
account of Consultant, any unemployment tax or other taxes, required under the law to be paid with respect to employees; nor shall Teradata withhold any monies from the fees of Consultant for income tax purposes. Consultant and Teradata hereby agree and acknowledge that this Agreement does not impose any obligation on Teradata to offer employment to Consultant at any time. Nothing contained in this Agreement shall be construed to create a partnership or joint venture between Teradata and Consultant, nor to authorize either party to act as general or special agent of the other party in any respect.
9. Confidentiality.
(a) Confidentiality. Consultant acknowledges that the information, observations and data obtained by Consultant while employed by Teradata and while providing the Consulting Services pursuant to this Agreement, including all information about Teradata’s business, operations and prospects, whether in written or oral or other intangible form, shall be treated as confidential, unless such information (i) is, or becomes, publicly known, through publication, inspection of a product, or otherwise, and through no unlawful act of Consultant; (ii) is received by Consultant from a third party without similar restriction as to non-disclosure and without breach of this Agreement; (iii) is specifically approved for release by written authorization of Teradata; or (iv) is disclosed by Consultant upon receipt of a legal opinion from counsel that such disclosure is required pursuant to the lawful requirement or request of a governmental agency or disclosure is otherwise required by operation of law (but only after Consultant has provided Teradata with prior written notice, reasonable assistance and the opportunity to contest such court order). Upon termination of this Agreement, Consultant shall destroy or return all confidential information to Teradata, and all confidential information Consultant has received or learned shall continue to be subject to the same confidentiality requirements set forth above. Notwithstanding anything to the contrary herein, Consultant will be permitted to retain his Company-issued mobile phone and iPad following the termination of this Agreement provided that any confidential information is removed from such devises. The obligations in this paragraph will survive the termination of this Agreement.
(b) Securities Laws. Consultant acknowledges that it is aware that the United States securities laws prohibit any person who has received from an issuer material, non-public information from purchasing or selling securities of such issuer or from communicating this information to any other person under circumstances in which it is reasonably foreseeable that such person is likely to purchase or sell such securities and that Consultant will not trade in Teradata stock while in possession of such information regarding Teradata. Consultant further acknowledges that Consultant has received a copy of the Teradata Insider Trading Policy and will abide by such policy during the term of this Agreement.
(c) Protected Activity. Nothing contained in this Agreement, or any other agreement, policy, practice, procedure, directive or instruction maintained by Teradata shall prohibit Consultant from reporting possible violations of federal, state or local laws or regulations to any federal, state or local governmental agency or commission (a “Government Agency”) or from making other disclosures that are protected under the whistleblower provisions of federal, state or local laws or regulations. Consultant does not need prior authorization of any
647215.1 3
kind to make any such reports or disclosures to any Government Agency and Consultant is not required to notify Teradata that Consultant has made such reports or disclosures. Nothing in this Agreement limits any right Consultant may have to receive a whistleblower award or bounty for information provided to any Government Agency. Consultant hereby acknowledges that Teradata has informed Consultant, in accordance with 18 U.S.C. § 1833(b), that Consultant may not be held criminally or civilly liable under any federal or state trade secret law for the disclosure of a trade secret where the disclosure: (i) is made in confidence to a federal, state, or local government official, either directly or indirectly, or to an attorney, and solely for the purpose of reporting or investigating a suspected violation of law; or (ii) is made in a complaint or other document filed in a lawsuit or other proceeding, if such filing is made under seal.
10. Termination of Consulting Services. Consultant may terminate this Agreement at any time and for any reason by providing at least thirty (30) days prior written notice to the Company in accordance with Section 11(h) below. The Company may terminate this Agreement for Cause (as defined below) by provided at least thirty (30) days prior written notice to Consultant. For purposes of this Agreement, “Cause” shall mean (a) conviction for committing a felony under federal law or the law of the state in which such action occurred, (b) dishonesty in the course of fulfilling the Consultant’s obligations hereunder, (c) failure to perform substantially such obligations in any material respect, or (d) a material violation of the Company’s ethics and compliance program. In the event of such termination, Consultant shall be entitled to receive all earned but unpaid Consulting Fees and shall have no further rights to payment of any consulting fees or other compensation hereunder.
11. Miscellaneous.
(a) Entire Agreement. This Agreement contains the entire understanding and agreement between the Parties relating to the subject matter hereof and supersedes all prior or contemporaneous negotiations, arrangements, agreements, understandings, representations and statements, whether oral or written, with respect to that agreement.
(b) Amendments. No provision of this Agreement may be amended, modified or waived except by a written instrument signed by each of the Parties hereto (or, in the case of a waiver, by the party against whom enforcement of the waiver is sought).
(c) Successors. This Agreement is personal to Consultant and without the prior written consent of Teradata shall not be assignable by Consultant other than by will or the laws of descent and distribution. This Agreement shall inure to the benefit of and be enforceable by Consultant’s legal representatives. This Agreement shall inure to the benefit of and be binding upon Teradata and its respective successors and assigns. Except as provided in the next sentence, Teradata may not assign this Agreement or delegate any of its obligations hereunder without the prior written consent of Consultant.
(d) Choice of Law. This Agreement shall be governed in all respects by the laws of the United States of America and by the laws of the California but excluding its conflict of law provisions that would require the application of the laws of any other state; however, the Federal Arbitration Act will govern all issues of arbitrability.
647215.1 4
(e) Effect of Waivers and Consents. No waiver of any default or breach by any party hereto shall be implied from any omission by a party to take any action on account of such default or breach if such default or breach persists or is repeated and no express waiver shall affect any default or breach other than the default or breach specified in the express waiver, and that only for the time and to the extent therein stated. One or more waivers of any covenant, term or condition of this Agreement by a party shall not be construed to be a waiver of any subsequent breach of the same covenant, term or condition. The consent or approval by any party shall not be deemed to waive or render unnecessary the consent to or approval of said party of any subsequent or similar acts by a party.
(f) Counterparts. This Agreement may be executed in one or more counterparts, each of which shall be an original, but all of which taken together shall constitute one instrument.
(g) Severability. In construing this Agreement, if any portion of this Agreement shall be found to be invalid or unenforceable, the remaining terms and provisions of this Agreement shall be given effect to the maximum extent permitted without considering the void, invalid or unenforceable provision.
(h) Notices. All notices and other communications hereunder shall be in writing and shall be given by hand delivery to the other party or by registered or certified mail, return receipt requested, postage prepaid, or by overnight courier, addressed as follows:
If to Consultant: at Consultant's most recent address on the records of Teradata;
If to Teradata: 17095 Via Del Campo,
San Diego, CA 92127
Attn: General Counsel/Legal Notices
Email: Law.notices@teradata.com
or to such other address as a party shall have furnished to the other in writing in accordance herewith. Notice and communications shall be effective when actually received by the addressee.
(i) Section 409A of the Code. The intent of the Parties is that payments under this Agreement comply with Section 409A of the Code or are exempt therefrom and, accordingly, to the maximum extent permitted, this Agreement shall be interpreted to be in compliance therewith.
(Signatures are on the following page)
IN WITNESS WHEREOF, the Parties hereto have executed this Agreement as of the date first set forth above.
647215.1 5
TERADATA CORPORATION
____________________________________
By:
Title:
CONSULTANT
____________________________________
Victor L. Lund
647215.1 6
EXHBIT A
Consulting Services
Consultant shall consult with and advise the Chief Executive Officer of the Company with respect to the following matters:
•Strategy;
•Business development;
•Corporate governance;
•Go-to-market and customer activities;
•Product development and product management;
•Product marketing;
•Management and operational matters; and
•Investor relations.
647215.1 7
CERTIFICATION OF CHIEF EXECUTIVE OFFICER
PURSUANT TO SECURITIES
EXCHANGE ACT RULE 13a-14
I, Stephen McMillan, certify that:
1.I have reviewed this quarterly report on Form 10-Q of Teradata Corporation;
2.Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3.Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4.The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a)designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b)designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c)evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d)disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
5.The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a)all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b)any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date : August 10, 2020 | /s/ Stephen McMillan | |||||||
| Stephen McMillan | ||||||||
| President and Chief Executive Officer | ||||||||
CERTIFICATION OF CHIEF FINANCIAL OFFICER
PURSUANT TO SECURITIES
EXCHANGE ACT RULE 13a-14
I, Mark A. Culhane, certify that:
1. I have reviewed this quarterly report on Form 10-Q of Teradata Corporation;
2. Based on my knowledge, this report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements made, in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this report;
3. Based on my knowledge, the financial statements, and other financial information included in this report, fairly present in all material respects the financial condition, results of operations and cash flows of the registrant as of, and for, the periods presented in this report;
4. The registrant’s other certifying officer(s) and I are responsible for establishing and maintaining disclosure controls and procedures (as defined in Exchange Act Rules 13a-15(e) and 15d-15(e)) and internal control over financial reporting (as defined in Exchange Act Rules 13a-15(f) and 15d-15(f)) for the registrant and have:
a) designed such disclosure controls and procedures, or caused such disclosure controls and procedures to be designed under our supervision, to ensure that material information relating to the registrant, including its consolidated subsidiaries, is made known to us by others within those entities, particularly during the period in which this report is being prepared;
b) designed such internal control over financial reporting, or caused such internal control over financial reporting to be designed under our supervision, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles;
c) evaluated the effectiveness of the registrant’s disclosure controls and procedures and presented in this report our conclusions about the effectiveness of the disclosure controls and procedures, as of the end of the period covered by this report based on such evaluation; and
d) disclosed in this report any change in the registrant’s internal control over financial reporting that occurred during the registrant’s most recent fiscal quarter (the registrant’s fourth fiscal quarter in the case of an annual report) that has materially affected, or is reasonably likely to materially affect, the registrant’s internal control over financial reporting;
5. The registrant’s other certifying officer(s) and I have disclosed, based on our most recent evaluation of internal control over financial reporting, to the registrant’s auditors and the audit committee of the registrant’s board of directors (or persons performing the equivalent functions):
a) all significant deficiencies and material weaknesses in the design or operation of internal control over financial reporting which are reasonably likely to adversely affect the registrant’s ability to record, process, summarize and report financial information; and
b) any fraud, whether or not material, that involves management or other employees who have a significant role in the registrant’s internal control over financial reporting.
| Date : August 10, 2020 | /s/ Mark A. Culhane | |||||||
| Mark A. Culhane | ||||||||
| Chief Financial Officer | ||||||||
CERTIFICATION PURSUANT TO
18 U.S.C. SECTION 1350,
AS ADOPTED PURSUANT TO
SECTION 906 OF THE SARBANES-OXLEY ACT OF 2002
In connection with the Quarterly Report of Teradata Corporation, a Delaware corporation (the “Company”), on Form 10-Q for the period ended June 30, 2020 as filed with the U.S. Securities and Exchange Commission on the date hereof (the “Report”), each of the undersigned officers of the Company does hereby certify, pursuant to 18 U.S.C. § 1350 (section 906 of the Sarbanes-Oxley Act of 2002), that:
(1) the Report fully complies with the requirements of section 13(a) or 15(d) of the Securities Exchange Act of 1934; and
(2) the information contained in the Report fairly presents, in all material respects, the financial condition and results of operations of the Company.
The foregoing certification (i) is given to such officers’ knowledge, based upon such officers’ investigation as such officers reasonably deem appropriate; and (ii) is being furnished solely pursuant to 18 U.S.C. § 1350 (section 906 of the Sarbanes-Oxley Act of 2002) and is not being filed as part of the Report or as a separate disclosure document.
| Date: August 10, 2020 | /s/ Stephen McMillan | |||||||
| Stephen McMillan | ||||||||
| President and Chief Executive Officer | ||||||||
| Date: August 10, 2020 | /s/ Mark A. Culhane | |||||||
| Mark A. Culhane | ||||||||
| Chief Financial Officer | ||||||||
A signed original of this written statement required by Section 906, or other document authenticating, acknowledging, or otherwise adopting the signatures that appear in typed form within the electronic version of this written statement required by Section 906, has been provided to Teradata Corporation and will be retained by Teradata Corporation and furnished to the United States Securities and Exchange Commission or its staff upon request.
Serious News for Serious Traders! Try StreetInsider.com Premium Free!
You May Also Be Interested In
- Tachyum Is Testing Open Sourcing of Prodigy Software Through Git
- Anon Debuts Integration Platform for the Internet with $6.5M Funding
- VEON Announces 2024 AGM and Board Nominees
Create E-mail Alert Related Categories
SEC FilingsSign up for StreetInsider Free!
Receive full access to all new and archived articles, unlimited portfolio tracking, e-mail alerts, custom newswires and RSS feeds - and more!
