Workday, Inc 10-Q for FY2021 Q3

Workday, Inc. (WDAY)

10-Q 2020-11-20 For: 2020-10-31

Added on April 11, 2026

About this 10-Q

Workday, Inc filed this 10-Q on November 20, 2020, covering the quarter ended October 31, 2020 (FY2021 Q3).

Headline figures

Quarter ended October 31, 2020, as reported in this filing, compared with the same period a year earlier where the filing states it.

Revenue: $1.11B; up 17.9% from $938.1M a year earlier
Net loss: $24.34M; compared with a net loss of $115.73M a year earlier

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Delaware						20-2480422
(State or other jurisdiction of incorporation or organization)						(I.R.S Employer Identification No.)


Title of each class	Trading Symbol(s)	Name of each exchange on which registered
Class A Common Stock, par value $0.001	WDAY	The Nasdaq Stock Market LLC
		(Nasdaq Global Select Market)


Large accelerated filer	☒	Accelerated filer	☐
Non-accelerated filer	☐	Smaller reporting company	☐
		Emerging growth company	☐


		Page No.
PART I. FINANCIAL INFORMATION

Item 1.	Financial Statements (unaudited):

	Condensed Consolidated Balance Sheets as of October 31, 2020 and January 31, 2020	3

	Condensed Consolidated Statements of Operations for the Three and N ine Months ended October 31, 2020, and 2019	4

	Condensed Consolidated Statements of Comprehensive Loss for the Three and Nine Months ended October 31, 2020, and 2019	5

	Condensed Consolidated Statements of Stockholders’ Equity for the Three and Nine Months ended October 31, 2020, and 2019	6

	Condensed Consolidated Statements of Cash Flows for the Three and Nine Months ended October 31, 2020, and 2019	7

	Notes to Condensed Consolidated Financial Statements	9

Item 2.	Management’s Discussion and Analysis of Financial Condition and Results of Operations	28

Item 3.	Quantitative and Qualitative Disclosures About Market Risk	41

Item 4.	Controls and Procedures	42

PART II. OTHER INFORMATION

Item 1.	Legal Proceedings	43

Item 1A.	Risk Factors	44

Item 2.	Unregistered Sales of Equity Securities and Use of Proceeds	67

Item 6.	Exhibits	68

	Signatures	69


	October 31, 2020		January 31, 2020
Assets
Current assets:
Cash and cash equivalents	$	1,067,038	$	731,141
Marketable securities	1,880,772		1,213,432
Trade and other receivables, net	742,744		877,578
Deferred costs	110,024		100,459
Prepaid expenses and other current assets	157,664		172,012
Total current assets	3,958,242		3,094,622
Property and equipment, net	976,610		936,179
Operating lease right-of-use assets	415,547		290,902
Deferred costs, noncurrent	232,413		222,395
Acquisition-related intangible assets, net	262,603		308,401
Goodwill	1,819,625		1,819,261
Other assets	179,987		144,605
Total assets	$	7,845,027	$	6,816,365
Liabilities and stockholders’ equity
Current liabilities:
Accounts payable	$	54,949	$	57,556
Accrued expenses and other current liabilities	129,794		130,050
Accrued compensation	264,443		248,154
Unearned revenue	2,000,417		2,223,178
Operating lease liabilities	84,552		66,147
Debt, current	1,091,050		244,319
Total current liabilities	3,625,205		2,969,404
Debt, noncurrent	701,178		1,017,967
Unearned revenue, noncurrent	68,874		86,025
Operating lease liabilities, noncurrent	352,900		241,425
Other liabilities	18,816		14,993
Total liabilities	4,766,973		4,329,814
Stockholders’ equity:
Common stock	240		231
Additional paid-in capital	6,184,070		5,090,187

Treasury stock	(269,083)		—
Accumulated other comprehensive income (loss)	1,110		23,492
Accumulated deficit	(2,838,283)		(2,627,359)
Total stockholders’ equity	3,078,054		2,486,551
Total liabilities and stockholders’ equity	$	7,845,027	$	6,816,365


☒			Quarterly report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


☐			Transition report pursuant to Section 13 or 15(d) of the Securities Exchange Act of 1934


	Three Months Ended October 31,				Nine Months Ended October 31,
	2020		2019		2020		2019
Revenues:
Subscription services	$	968,547	$	798,516	$	2,782,201	$	2,256,695
Professional services	137,413		139,584		404,111		394,212
Total revenues	1,105,960		938,100		3,186,312		2,650,907
Costs and expenses (1):
Costs of subscription services	152,396		122,305		442,666		355,935
Costs of professional services	142,785		148,625		442,422		424,548
Product development	419,962		401,742		1,282,127		1,127,695
Sales and marketing	302,870		286,794		897,924		839,930
General and administrative	102,024		88,884		296,461		258,932
Total costs and expenses	1,120,037		1,048,350		3,361,600		3,007,040
Operating income (loss)	(14,077)		(110,250)		(175,288)		(356,133)
Other income (expense), net	(8,846)		(4,136)		(31,272)		2,899
Loss before provision for (benefit from) income taxes	(22,923)		(114,386)		(206,560)		(353,234)
Provision for (benefit from) income taxes	1,417		1,343		4,164		(518)
Net loss	$	(24,340)	$	(115,729)	$	(210,724)	$	(352,716)
Net loss per share, basic and diluted	$	(0.10)	$	(0.51)	$	(0.89)	$	(1.56)
Weighted-average shares used to compute net loss per share, basic and diluted	238,059		228,461		235,685		226,071


(1) Costs and expenses include share-based compensation expenses as follows:
Costs of subscription services	$	16,767	$	13,634	$	45,484	$	36,050
Costs of professional services	27,349		22,249		74,467		57,390
Product development	128,423		118,215		378,950		315,210
Sales and marketing	54,077		47,142		150,881		128,686
General and administrative	33,216		29,762		97,958		88,122


	As of October 31,
	2020		2019
Reconciliation of cash, cash equivalents, and restricted cash as shown in the statements of cash flows:
Cash and cash equivalents	$	1,067,038	$	912,748
Restricted cash included in Prepaid expenses and other current assets	4,351		3,984
Restricted cash included in Other assets	127		125
Total cash, cash equivalents, and restricted cash	$	1,071,516	$	916,857


	Amortized Cost		Unrealized Gains		Unrealized Losses		Aggregate Fair Value
U.S. treasury securities	$	930,774	$	274	$	(26)	$	931,022
U.S. agency obligations	542,942		144		(136)		542,950
Corporate bonds	355,847		2,442		(12)		358,277
Commercial paper	367,413		—		—		367,413
	$	2,196,976	$	2,860	$	(174)	$	2,199,662
Included in Cash and cash equivalents	$	329,586	$	1	$	(1)	$	329,586
Included in Marketable securities	$	1,867,390	$	2,859	$	(173)	$	1,870,076


	Condensed Consolidated Balance Sheets Location	October 31, 2020		January 31, 2020
Money market funds (1)	Cash and cash equivalents	$	517,031	$	386,909
Marketable equity investments (1)	Marketable securities	10,696		—
Equity investments accounted for under the equity method	Other assets	48,181		—
Non-marketable equity investments measured using the measurement alternative (2)	Other assets	62,741		59,026
		$	638,649	$	445,935


	Level 1		Level 2		Level 3		Total
U.S. treasury securities	$	931,022	$	—	$	—	$	931,022
U.S. agency obligations	—		542,950		—		542,950
Corporate bonds	—		358,277		—		358,277
Commercial paper	—		367,413		—		367,413
Money market funds	517,031		—		—		517,031
Marketable equity investments	10,696		—		—		10,696
Foreign currency derivative assets	—		20,478		—		20,478
Total assets	$	1,458,749	$	1,289,118	$	—	$	2,747,867
Foreign currency derivative liabilities	$	—	$	13,787	$	—	$	13,787
Total liabilities	$	—	$	13,787	$	—	$	13,787


	October 31, 2020				January 31, 2020
	Net Carrying Amount		Estimated Fair Value		Net Carrying Amount		Estimated Fair Value

1.50% Convertible senior notes	$	—	$	—	$	244,319	$	571,057
0.25% Convertible senior notes	1,053,550		1,732,671		1,017,967		1,587,978


	October 31, 2020		January 31, 2020
Land and land improvements	$	37,065	$	38,737
Buildings	493,757		489,028
Computers, equipment, and software	894,031		723,482
Furniture and fixtures	54,952		51,917
Leasehold improvements	200,807		189,668
Property and equipment, gross	1,680,612		1,492,832
Less accumulated depreciation and amortization	(704,002)		(556,653)
Property and equipment, net	$	976,610	$	936,179


	Three Months Ended October 31,				Nine Months Ended October 31,
	2020		2019		2020		2019
Net loss	$	(24,340)	$	(115,729)	$	(210,724)	$	(352,716)
Other comprehensive (loss) income, net of tax:
Net change in foreign currency translation adjustment	(2)		173		435		(420)
Net change in unrealized gains (losses) on available-for-sale debt securities, net of tax provision of $0, $444, $0, and $875, respectively	(2,578)		1,194		(332)		2,786
Net change in market value of effective foreign currency forward exchange contracts, net of tax provision of $0, $(1,315), $0, and $3,295, respectively	3,044		(9,206)		(22,485)		23,062
Other comprehensive (loss) income, net of tax	464		(7,839)		(22,382)		25,428
Comprehensive loss	$	(23,876)	$	(123,568)	$	(233,106)	$	(327,288)


	Three Months Ended October 31,		Nine Months Ended October 31,
	2020	2019	2020	2019
Common stock (in shares):
Balance, beginning of period	237,160,715	227,607,594	231,708,391	222,052,063
Issuance of common stock under employee equity plans	1,935,725	1,931,916	7,388,498	7,487,250
Settlement of warrants	(186,202)	—	(186,202)	—
Settlement of convertible senior notes	—	20	1,654,308	217
Purchase of treasury stock from the exercise of convertible senior notes hedges	—	—	(1,654,757)	—
Balance, end of period	238,910,238	229,539,530	238,910,238	229,539,530


	Three Months Ended October 31,				Nine Months Ended October 31,
	2020		2019		2020		2019
Cash flows from operating activities:
Net loss	$	(24,340)	$	(115,729)	$	(210,724)	$	(352,716)
Adjustments to reconcile net loss to net cash provided by (used in) operating activities:
Depreciation and amortization	73,864		72,233		218,556		201,152
Share-based compensation expenses	259,832		231,002		747,740		625,149
Amortization of deferred costs	28,732		23,015		82,141		65,897
Amortization of debt discount and issuance costs	12,098		13,512		41,466		39,400
Non-cash lease expense	22,141		17,081		60,389		49,155
Other	(8,760)		2,744		8,040		(8,953)
Changes in operating assets and liabilities, net of business combinations:
Trade and other receivables, net	(53,923)		2,197		127,663		86,139
Deferred costs	(41,823)		(34,415)		(101,724)		(81,107)
Prepaid expenses and other assets	25,898		7,463		36,738		677
Accounts payable	3,762		1,938		(9,313)		4,488
Accrued expenses and other liabilities	(5,037)		41,716		(46,378)		6,595
Unearned revenue	1,358		(4,755)		(239,899)		(68,392)
Net cash provided by (used in) operating activities	293,802		258,002		714,695		567,484
Cash flows from investing activities:
Purchases of marketable securities	(806,713)		(375,144)		(1,963,244)		(1,429,046)
Maturities of marketable securities	427,910		494,023		1,282,324		1,339,830
Sales of marketable securities	—		—		5,279		55,499
Owned real estate projects	(1,072)		(21,832)		(5,323)		(95,615)
Capital expenditures, excluding owned real estate projects	(78,197)		(55,163)		(204,692)		(196,274)
Business combinations, net of cash acquired	—		—		—		(12,885)

Purchases of non-marketable equity and other investments	(4,618)		(9,577)		(63,218)		(17,293)
Sales and maturities of non-marketable equity and other investments	24		252		6,223		252
Other	—		—		—		(9)
Net cash provided by (used in) investing activities	(462,666)		32,559		(942,651)		(355,541)
Cash flows from financing activities:



Proceeds from borrowings on term loan, net	—		—		747,795		—


	Three Months Ended October 31,				Nine Months Ended October 31,
	2020		2019		2020		2019
Supplemental cash flow data:
Cash paid for interest, net of amounts capitalized	$	5,309	$	959	$	11,686	$	1,431
Cash paid for income taxes	2,598		1,415		7,239		7,418
Non-cash investing and financing activities:
Purchases of property and equipment, accrued but not paid	49,098		33,155		49,098		33,155


	October 31, 2020		January 31, 2020
Developed technology	$	218,400	$	218,400
Customer relationships	224,000		224,000
Trade name	12,400		12,400
Backlog	11,000		11,000
Acquisition-related intangible assets, gross	465,800		465,800
Less accumulated amortization	(203,197)		(157,399)
Acquisition-related intangible assets, net	$	262,603	$	308,401


Fiscal Period:
Remainder of 2021	$	13,977
2022	52,833
2023	50,109
2024	38,933
2025	27,500
Thereafter	79,251
Total	$	262,603


	October 31, 2020		January 31, 2020
Non-marketable equity and other investments (1)	$	76,155	$	75,004
Equity investments accounted for under the equity method	48,181		—
Prepayments for goods and services	20,219		27,928
Technology patents and other intangible assets, net	15,564		17,898
Net deferred tax assets	7,180		6,912
Deposits	5,869		6,335
Derivative assets	5,037		9,529
Other	1,782		999
Total	$	179,987	$	144,605


	Gross Amounts of Recognized Assets		Gross Amounts Offset on the Condensed Consolidated Balance Sheets		Net Amounts of Assets Presented on the Condensed Consolidated Balance Sheets		Gross Amounts Not Offset on the Condensed Consolidated Balance Sheets				Net Assets Exposed
							Financial Instruments		Cash Collateral Received
Derivative assets:
Counterparty A	$	553	$	—	$	553	$	(1,785)	$	—	$	(1,232)
Counterparty B	17,975		—		17,975		(4,732)		—		13,243
Counterparty C	1,950		—		1,950		(7,270)		—		(5,320)
Total	$	20,478	$	—	$	20,478	$	(13,787)	$	—	$	6,691


	Gross Amounts of Recognized Liabilities		Gross Amounts Offset on the Condensed Consolidated Balance Sheets		Net Amounts of Liabilities Presented on the Condensed Consolidated Balance Sheets		Gross Amounts Not Offset on the Condensed Consolidated Balance Sheets				Net Liabilities Exposed
							Financial Instruments		Cash Collateral Pledged
Derivative liabilities:
Counterparty A	$	1,785	$	—	$	1,785	$	(1,785)	$	—	$	—
Counterparty B	4,732		—		4,732		(4,732)		—		—
Counterparty C	7,270		—		7,270		(7,270)		—		—
Total	$	13,787	$	—	$	13,787	$	(13,787)	$	—	$	—


	October 31, 2020		January 31, 2020
2020 Notes, net of unamortized debt discounts of $0 and $5,319, respectively, and unamortized debt issuance costs of $0 and $307, respectively	$	—	$	244,319
2022 Notes, net of unamortized debt discounts of $90,964 and $124,403, respectively, and unamortized debt issuance costs of $5,486 and $7,630, respectively	1,053,550		1,017,967
Term Loan, net of unamortized debt discounts of $1,783 and $0, respectively, and unamortized debt issuance costs of $164 and $0, respectively	738,678		—
Total debt	$	1,792,228	$	1,262,286
Less: current debt	$	(1,091,050)	$	(244,319)
Total debt, noncurrent	$	701,178	$	1,017,967


Fiscal Period:
Remainder of 2021	$	9,375
2022	37,500
2023	1,225,000
2024	75,000
2025	75,000
Thereafter	468,750
Total	$	1,890,625


	October 31, 2020	January 31, 2020
Weighted average remaining lease term (in years)	6	6
Weighted average discount rate	1.81%	3.36%


Fiscal Period:
Remainder of 2021	$	21,398
2022	94,858
2023	83,040
2024	76,189
2025	65,123
Thereafter	139,056
Total lease payments	479,664
Less imputed interest	(42,212)
Total	$	437,452


	Number of Shares	Weighted-Average Grant Date Fair Value
Balance as of January 31, 2020	11,914,064	$	147.96
RSUs granted	7,963,747	150.76
RSUs vested	(4,630,623)	138.81
RSUs forfeited	(828,949)	147.34
Balance as of October 31, 2020	14,418,239	152.48


	Outstanding Stock Options	Weighted-Average Exercise Price		Aggregate Intrinsic Value
Balance as of January 31, 2020	3,435,577	$	9.78	$	601

Stock options exercised	(1,709,799)	6.32
Stock options canceled	(41,363)	39.22
Balance as of October 31, 2020	1,684,415	12.57		333
Vested and expected to vest as of October 31, 2020	1,679,303	12.50		332
Exercisable as of October 31, 2020	1,521,062	10.33		304


	October 31, 2020		January 31, 2020
United States	$	1,185,510	$	1,064,292
Ireland	133,923		122,619
Other countries	72,724		40,170
Total	$	1,392,157	$	1,227,081


	Three Months Ended October 31, 2020
	GAAP Operating Expenses		Share-Based Compensation Expenses (1)		Other Operating Expenses (2)		Non-GAAP Operating Expenses (3)
Costs of subscription services	$	152,396	$	(16,767)	$	(7,811)	$	127,818
Costs of professional services	142,785		(27,349)		(824)		114,612
Product development	419,962		(128,423)		(4,006)		287,533
Sales and marketing	302,870		(54,077)		(8,352)		240,441
General and administrative	102,024		(33,216)		(1,355)		67,453
Total costs and expenses	$	1,120,037	$	(259,832)	$	(22,348)	$	837,857


	Three Months Ended October 31, 2019
	GAAP Operating Expenses		Share-Based Compensation Expenses (1)		Other Operating Expenses (2)		Non-GAAP Operating Expenses (3)
Costs of subscription services	$	122,305	$	(13,634)	$	(7,593)	$	101,078
Costs of professional services	148,625		(22,249)		(569)		125,807
Product development	401,742		(118,215)		(4,420)		279,107
Sales and marketing	286,794		(47,142)		(7,820)		231,832
General and administrative	88,884		(29,762)		(1,453)		57,669
Total costs and expenses	$	1,048,350	$	(231,002)	$	(21,855)	$	795,493


	Nine Months Ended October 31, 2020
	GAAP Operating Expenses		Share-Based Compensation Expenses (1)		Other Operating Expenses (2)		Non-GAAP Operating Expenses (3)
Costs of subscription services	$	442,666	$	(45,484)	$	(26,298)	$	370,884
Costs of professional services	442,422		(74,467)		(4,843)		363,112
Product development	1,282,127		(378,950)		(20,710)		882,467
Sales and marketing	897,924		(150,881)		(26,841)		720,202
General and administrative	296,461		(97,958)		(5,111)		193,392
Total costs and expenses	$	3,361,600	$	(747,740)	$	(83,803)	$	2,530,057


	Nine Months Ended October 31, 2019
	GAAP Operating Expenses		Share-Based Compensation Expenses (1)		Other Operating Expenses (2)		Non-GAAP Operating Expenses (3)
Costs of subscription services	$	355,935	$	(36,050)	$	(31,992)	$	287,893
Costs of professional services	424,548		(57,390)		(5,261)		361,897
Product development	1,127,695		(315,210)		(23,431)		789,054
Sales and marketing	839,930		(128,686)		(31,103)		680,141
General and administrative	258,932		(88,122)		(6,772)		164,038
Total costs and expenses	$	3,007,040	$	(625,458)	$	(98,559)	$	2,283,023


	Payments Due by Period
	(in thousands)
	Total		Remainder of Fiscal 2021		Fiscal 2022 - Fiscal 2023		Fiscal 2024 - Fiscal 2025		Thereafter
Term Loan	$	740,625	$	9,375	$	112,500	$	150,000	$	468,750
Interest obligation on Term Loan	40,047		3,486		19,410		15,546		1,605
Total	$	780,672	$	12,861	$	131,910	$	165,546	$	470,355


			Workday, Inc.

			/s/ Robynne D. Sisco
			Robynne D. Sisco
			President and Chief Financial Officer (Principal Financial Officer)


ELIGIBILITY			Executive officers for purposes of Section 16 of the Exchange Act of 1934, as amended (“Section 16 Officers”), other Executive Vice Presidents, and other employees designated by the Board of Directors or the Compensation Committee of Workday, Inc. (“Workday”) are eligible to participate in the Change in Control Policy (each a “Participant”). A Participant shall cease to be a Participant under the Policy (i) upon termination of employment with Workday prior to a Change in Control (as defined below), (ii) in the event such Participant is no longer either a Section 16 Officer or an Executive Vice President, or (iii) upon the recommendation of a Co-Chief Executive Officer or the Chief People Officer and confirmation by the Board of Directors or Compensation Committee.
BENEFITS			Under the Change in Control Policy, in the event of a Qualifying Termination in connection with a Change in Control (as each is defined below) and contingent upon the Participant’s execution and non-revocation of a binding separation and release agreement within 60 days following the Qualifying Termination in a form acceptable to Workday, the Participant will be entitled to receive: i.A lump sum cash payment in an amount equal to such Participant’s annual base salary as in effect immediately prior to the Change in Control, less applicable withholding taxes; ii.Accelerated vesting of 50% of the amount of Participant’s unvested equity awards immediately prior to the Qualifying Termination; and iii.A lump sum cash payment in an amount equal to an estimate of the aggregate premiums for continuation coverage for twelve months pursuant to the Consolidated Omnibus Budget Reconciliation Act of 1985 (“COBRA”). The foregoing benefits in (i) and (iii) will be provided on Workday’s first customary payroll date following the sixty-first (61st) day following the Qualifying Termination.
DEFINITIONS			A “Change in Control” shall be deemed to have occurred if any one of the following events shall have occurred: i.any “person” (as such term is used in Sections 13(d) and 14(d) of the Securities Exchange Act of 1934 (the “Exchange Act”)) other than Workday’s founders or a trust, foundation or other estate planning vehicle established by one of Workday’s founders, becomes the “beneficial owner” (as defined in Rule 13d-3 of the Exchange Act), directly or indirectly, of securities representing fifty percent (50%) or more of the total voting power represented by Workday’s then-outstanding voting securities; ii.the consummation of the sale or disposition of all or substantially all of Workday’s assets; or iii.the consummation of a merger or consolidation of Workday with any other corporation, other than a merger or consolidation which would result in Workday’s voting securities 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) at least fifty percent (50%) of the total voting power represented by our voting securities or such surviving entity or its parent outstanding immediately after such merger or consolidation. A “Qualifying Termination” shall be an involuntary termination of Participant’s employment upon or within twelve months following a “Change in Control” other than for “Cause,” death, or “Disability” (as defined in Section 409A of the Code) or a voluntary resignation for “Good Reason.”


DEFINITIONS (Continued)			“Cause” shall mean i.Misconduct or gross negligence in the performance of Participant’s duties; ii.Participant’s conviction or a plea of “no contest” for (x) a felony under the laws of the United States or any state thereof or (y) a crime involving moral turpitude for which the potential penalty includes imprisonment of at least one year; iii.Participant’s willful malfeasance or willful misconduct in connection with Participant’s duties or any act or omission which is materially injurious to the financial condition or business reputation of Workday or its affiliates; or iv.Participant’s breach of the provisions of any contract or agreement between Participant and Workday, including without limitation Workday’s standard Proprietary Information and Inventions Agreement. “Good Reason” shall mean i.any material reduction in Participant’s Base Salary or target bonus opportunity (excluding any change in value of equity incentives or a reduction affecting substantially all similarly situated Participants); ii.the primary business office for Participant being relocated by more than 50 miles from Participant’s current primary business office; or iii.a material and sustained diminution to Participant’s duties and responsibilities as in effect immediately following a Change in Control; provided that any of the events described in clauses (i)-(iii) of this section shall constitute Good Reason only if Workday fails to cure such event within 30 days after receipt from Participant of written notice of the event which constitutes Good Reason and Participant resigns his or her employment within 30 days following expiration of such cure period; provided, further, that Good Reason shall cease to exist for an event on the 90th day following its initial occurrence, unless Participant has given Workday written notice thereof prior to such date. The “Code” shall mean the Internal Revenue Code of 1986, as amended.
POLICY TERMINATION			The Change in Control Policy will be reviewed annually by the Compensation Committee, and may be amended or terminated by the Compensation Committee or Board of Directors.
SUCCESSORS			Workday shall require any successor (whether pursuant to a Change in Control, direct or indirect, and whether by purchase, merger, consolidation, liquidation or otherwise) to all or substantially all of the business and/or assets of Workday to expressly assume and agree to perform the obligations under this Policy in the same manner and to the same extent as Workday would be required to perform in the absence of such a succession of Workday. For all purposes of this Policy, the term “Workday” shall include any successor to Workday’s business and/or assets or which becomes bound by this Policy by operation of law.
EXCLUSIVE BENEFIT ELECTION			In order to be eligible to participate in the Change in Control Policy, the Participant must opt in to the Change in Control Policy and waive any existing severance arrangement that would be triggered by a Change in Control or similar transaction.
280G BEST-OF PROVISION			If the benefits described in the Change in Control Policy constitute “parachute payments” within the meaning of the Code and would be subject to the excise tax imposed by Section 4999 of the Code, then at the Participant’s discretion, the benefits will be payable either (i) in full, or (ii) as to such lesser amount which would result in no portion of such benefits being subject to the excise tax under Section 4999 of the Code, whichever of the foregoing amounts (taking into consideration applicable taxes, including the excise tax under Section 4999) would result in the receipt by Participant on an after-tax basis of the greatest amount of benefits (even if some of such benefits are taxable under Section 4999).