NEIL HUDSPITH EMPLOYMENT AGREEMENT

This Agreement is entered into as of May 1, 2008 (the “Effective Date”) by and between Taleo Corporation, a Delaware corporation (the “Company”) and Neil Hudspith (“Executive”).

(a)            Positions and Duties .  As of the Effective Date, Executive will serve as Executive Vice President, Worldwide Field Operations.  Executive will assume and discharge such responsibilities as are commensurate with such position and as the Chief Executive Officer may direct from time to time. During Executive’s employment with the Company, Executive shall devote Executive’s full time, skill and attention to Executive’s duties and responsibilities and shall perform faithfully, diligently and competently. In addition, Executive shall comply with and be bound by the operating policies, procedures and practices of the Company in effect from time to time during Executive’s employment.  The period of Executive’s employment under this Agreement is referred to herein as the “Employment Term.”

(b)            Obligations .  During the Employment Term, Executive will devote Executive’s full business efforts and time to the Company.  For the duration of the Employment Term, Executive agrees not to actively engage in any other employment, occupation, or consulting activity for any direct or indirect remuneration (including membership on a board of directors) without the prior approval of the Chief Executive Officer; provided, however, that Executive may, without the approval of the Chief Executive Officer, serve in any capacity with any civic, educational, or charitable organization, provided such services do not interfere with Executive’s obligations to the Company.

2.              At-Will Employment .  Executive and the Company agree that Executive’s employment with the Company constitutes “at-will” employment.  Executive and the Company acknowledge that this employment relationship may be terminated at any time, upon written notice to the other party, with or without good cause or for any or no cause, at the option either of the Company or Executive.  However, as described in this Agreement, Executive may be entitled to severance benefits depending upon the circumstances of Executive’s termination or resignation of employment.  Upon the termination of Executive’s employment with the Company for any reason, Executive will be entitled to payment of all accrued but unpaid vacation, expense reimbursements, and other benefits due to Executive through the date of Executive’s termination of employment under any Company-provided or paid plans, policies, and arrangements.

(a)            Base Salary .  As of the Effective Date, the Company will pay Executive an annual salary of $310,000.00 USD as compensation for Executive’s services (“Base Salary”).  The Base Salary will be paid periodically in accordance with the Company’s normal payroll practices as in effect from time to time (but no less frequently than once per month) and be subject to the usual, required federal, state and local tax  withholding, employment tax withholding and other lawful deductions (“Withholdings”).  Executive’s salary will be subject to annual review, and adjustments, if any, will be made based upon the Company’s standard practices or the discretion of the Company’s Board of Directors.

(b)            Bonus .  Executive’s annual target for the aggregate amount of annual and quarterly bonuses will be $300,000.00 USD (“Target Bonus”), less Withholdings.  Allocation, eligibility and payment of Target Bonus will be based upon achievement of quarterly and yearly performance goals approved by the Chief Executive Officer and set forth in an annually and/or quarterly revised Target Bonus schedule. Target Bonus amounts will not be earned unless Executive remains employed through the relevant quarter (for quarterly bonus payments) and through the end of the fiscal year (for annual bonus payments).  Target Bonus amounts will be paid within sixty (60) days following the end of the period in which it is earned, and in no instance later than two and one-half (2½) months following the end of the year in which the applicable portion of the Target Bonus was earned.

(c)            Equity Compensation .  Subject to approval of the Compensation Committee or its delegate, within ninety (90) days of the Effective Date, Executive will be granted a restricted stock award in the amount of 25,000 shares of Company common stock (“Stock Award”).  The Company’s reacquisition right with respect to the shares subject to the Stock Award shall lapse, as follows:  one-sixteenth (1/16th) of the shares subject to the Stock Award upon the completion of the first complete fiscal quarter following the Effective Date, and the balance in a series of successive equal quarterly installments upon the Executive’s completion of each of the next fifteen (15) quarters of service thereafter, in each case subject to Executive’s continued employment or other service with the Company or one of its subsidiaries through the relevant lapse date.  The Stock Award will be subject to the terms, definitions and provisions of the Company’s 2004 Stock Plan and the Stock Award agreement by and between the Executive and the Company (the “Stock Award Agreement”), both of which documents are incorporated herein.

(d)            Car Allowance .  For a period of two (2) years, Executive will receive an annual car allowance of $12,000.00 USD, less Withholdings.  The car allowance will be paid periodically in accordance with the Company’s normal payroll practices as in effect from time to time (but no less frequently than once per month).

(e)            Relocation Related Reimbursements .   Executive’s relocation expenses shall be reimbursed in accordance with Schedule B hereto.  Should Executive resign without Good Reason (as defined below) or be terminated for Cause (as defined below) within one year of Executive’s hire date, Executive hereby agrees to repay a pro-rated portion of all relocation expense reimbursement payments made by Company to Executive as follows: for each full month not employed during the twelve months period from Executive’s hire date, Executive must repay Taleo 1/12 of all relocation reimbursement payments made to Executive or on behalf of Executive. Certain relocation reimbursements shall be subject to gross-up for income tax impact to executive in accordance with the Company’s standard relocation policy.

(a)            Vacation .  Executive will be eligible to receive four (4) weeks of paid annual vacation.  Executive’s use of vacation will be subject to the terms and conditions of the vacation policies in place at the Company, including without limitation, accrual limits and caps.

(b)            General .  During the Employment Term, Executive will be eligible to participate in accordance with the terms of all Company employee benefit plans, policies, and arrangements that are applicable to other senior executives of the Company, as such plans, policies, and arrangements may exist from time to time.

5.              Expenses .  The Company will reimburse Executive for reasonable travel and other expenses incurred by Executive in the furtherance of the performance of Executive’s duties hereunder, in accordance with the Company’s expense reimbursement policy as in effect from time to time.

(a)           If Company or a successor corporation terminates Executive’s employment for any reason other than Cause (as defined below) or if Executive resigns for Good Reason (as defined below) then Company or the successor corporation will (1) pay prorated bonuses for any partially completed bonus periods through Executives termination date (at an assumed 100% on-target achievement of goal), less Withholding, (2) continue to pay Executive’s Base Salary at the rate in effect at the time of Executive’s resignation or termination of employment for a period of 6 months from the date of Executive’s resignation or termination of employment, less Withholding, and (3) if Executive elects to continue Executive’s health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) following such termination or resignation of Executive’s employment, pay the same portion of Executive’s monthly premium under COBRA as it pays for active employees until the earliest of (i) the close of the 6 month period following the termination of Executive’s employment, (ii) the expiration of Executive’s continuation coverage under COBRA, or (iii) the date when Executive becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment.

(b)           If Company or a successor corporation terminates Executive’s employment for any reason other than Cause (as defined below) or if Executive resigns for Good Reason (as defined below) and either such event takes place within one year following a Change in Control (as defined below), then Company or the successor corporation will (1) pay prorated bonuses for any partially completed bonus periods through Executives termination date (at an assumed 100% on-target achievement of goal), less Withholding, (2) continue to pay Executive’s Base Salary at the rate in effect at the time of Executive’s resignation or termination of employment for a period of 12 months from the date of Executive’s resignation or termination of employment, less Withholding, (3) pay bonuses (at an assumed 100% on-target achievement of goal) at the rate in effect at the time of Executive’s resignation or termination of employment for a period of 12 months from the date of Executive’s resignation or termination of employment (bonuses will be prorated for any partially completed bonus periods through the 12 month period from the date of Executive’s resignation or termination of employment), less Withholding, and (4) if Executive elects to continue Executive’s health insurance coverage under the Consolidated Omnibus Budget Reconciliation Act (“COBRA”) following such termination or resignation of Executive’s employment, pay the same portion of Executive’s monthly premium under COBRA as it pays for active employees until the earliest of (i) the close of the 12 month period following the termination of Executive’s employment, (ii) the expiration of Executive’s continuation coverage under COBRA, or (iii) the date when Executive becomes eligible for substantially equivalent health insurance coverage in connection with new employment or self-employment.

(c)           All benefits set forth in Sections 6(a) and 6(b) are collectively referred to as “Severance.”  Severance payments shall be made by Company on the date such payments would have been made had Executive’s employment relationship with Company continued (e.g., Severance based on Base Salary shall be paid twice per month and Severance based on Target Bonuses shall be paid quarterly or annually as appropriate).

(d)           In addition to Severance, in the event that Company or a successor corporation terminates Executive’s employment for any reason other than Cause (as defined below) or if Executive resigns for Good Reason (as defined below) and either such event did not take place within one year following a Change in Control (as defined below), then Executive will receive immediate vesting with respect to the number of options that would have vested in accordance with Executive’s then-current stock option grants had Executive remained employed for an additional 6 months and, if applicable, the Company’s right of repurchase shall continue to lapse in accordance with Executive’s then-current restricted stock grants for a period of 6 months from the date of such termination or resignation of employment.  In the event of Executive’s termination of employment as described in this subsection (d), the Executive’s then vested stock options shall be exercisable for 3 months after Executive’s date of termination.  Notwithstanding the foregoing, in no case shall any option be exercisable after the expiration of its term.

(e)           In addition to Severance, in the event that Company or a successor corporation terminates Executive’s employment for any reason other than Cause (as defined below) or if Executive resigns for Good Reason (as defined below) and either such event takes place within one year following a Change in Control (as defined below), Executive will receive immediate vesting with respect to all unvested stock options that are held by Executive and the Company’s right of repurchase shall lapse entirely with respect to restricted stock grants from the Company to Executive.  In the event of Executive’s termination of employment as described in this subsection (e), the Executive’s then outstanding stock options shall be exercisable for 3 months after Executive’s date of termination.  Notwithstanding the foregoing, in no case shall any option be exercisable after the expiration of its term.

(f)            For purposes of this Section 6, “Cause” means (i) any act of personal dishonesty taken by Executive in connection with Executive’s employment responsibilities, (ii) Executive’s conviction of a felony, (iii) any act by Executive that constitutes material misconduct, (iv) repeated failures to follow the lawful, reasonable instructions of the Chief Executive Officer, or (v) substantial violations of employment or fiduciary duties, responsibilities or obligations to Company.

(g)           For purposes of this Section 6, “Good Reason” means (i) without Executive’s consent, a significant reduction of Executive’s duties, position or responsibilities relative to Executive’s duties, position or responsibilities in effect immediately prior to such reduction, other than a reduction where Executive are asked to assume substantially similar duties and responsibilities in a division of a larger entity after a Change in Control; (ii) without Executive’s consent, a reduction of Executive’s Base Salary or Target Bonus other than a one-time reduction that does not exceed twenty percent (20%) and that is also applied to substantially all of Company’s senior executives; (iii) without Executive’s consent, Executive’s relocation to a facility or a location greater than 75 miles from San Francisco, California.  If Executive does not notify Company in writing that Executive believes a significant reduction of Executive’s duties, position or responsibilities has occurred pursuant to this Section 6 within thirty days of the event or occurrence that Executive believes to have resulted in such a significant reduction, then such reduction shall be deemed for purposes of this Agreement as not constituting Good Reason, as that terms is used in this Section 6.  Disagreement as to the allocation, eligibility and payment of Target Bonus to be set forth in a Target Bonus Schedule shall not be a basis for Good Reason resignation.

(h)            For purposes of this Section 6, “Change in Control” means the occurrence of any of the following events: (i) any “person” (as such term is used in Sections 13(d) and 14(d) of the Exchange Act) becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities of the Company representing fifty percent (50%) or more of the total voting power represented by the Company’s then outstanding voting securities and such change in ownership results in a broad management changes at Company; or (ii) the consummation of the sale or disposition by Company of all or substantially all of Company’s assets; or (iii) the consummation of a merger or consolidation of Company with any other corporation, other than a merger or consolidation which would result in the voting securities of Company outstanding immediately prior thereto continuing to represent (either by remaining outstanding or by being converted into voting securities of the surviving entity or its parent) more than fifty percent (50%) of the total voting power represented by the voting securities of Company or such surviving entity or its parent outstanding immediately after such merger or consolidation.

(i)            Notwithstanding the above, Company’s Chief Executive Officer reserves the right to make reasonable organizational structure changes reasonably commensurate with the position of Chief Executive Officer.  Such changes may include the shifting or reassignment of divisional, geographic or team responsibilities among members of the executive team.  Such changes are within the reasonable discretion of the Chief Executive Officer and shall not constitute Good Reason, as that term is used in this Section 6.

(j)            Termination due to Death or Disability .  If Executive’s employment terminates by reason of death or Disability, then (i) Executive will be entitled to receive benefits only in accordance with the Company’s then applicable plans, policies, and arrangements, and (ii) Executive’s outstanding equity awards will terminate in accordance with the terms and conditions of the applicable award agreement(s).

(k)            Sole Right to Severance .  This Agreement is intended to represent Executive’s sole entitlement to severance payments and benefits in connection with the termination of Executive’s employment.  To the extent Executive receives severance or similar payments and/or benefits