SEVERANCE AGREEMENT
Exhibit 10.4
THIS SEVERANCE AGREEMENT (the “Agreement”), dated and effective as of May 3, 2011, is by and
between Carbonite, Inc., a Delaware corporation (the “Company”), and Xxxxx Xxxxxx (the “Employee”).
WHEREAS, the Employee currently serves as the Company’s Chief Executive Officer, President and
Chairman of the Board; and
WHEREAS, the Company and the Employee desire to set forth certain terms and conditions should
the Employee’s employment relationship with the Company terminate.
NOW, THEREFORE, in consideration of the mutual covenants contained in this Agreement, and for
other good and valuable consideration, the receipt and sufficiency of which consideration are
hereby acknowledged, the parties agree as follows:
1. Severance.
1.1 Termination. The Employee’s employment relationship with the Company shall
terminate automatically and immediately upon the Employee’s resignation (for any reason),
Disability, death or upon notice by the Company to the Employee of termination of employment (for
any reason). The date the employment relationship terminates is referred to as the “Termination
Date”. Upon the Termination Date, the Employee shall receive all earned but unpaid base salary and
benefits through the Termination Date. On or promptly after the Termination Date, the Employee
will return to the Company any property owned by the Company, including, but not limited to,
papers, files, documents, reference guides, equipment, keys, access cards, identification cards,
credit cards, computers, calculators, fax machines, printers, software, computer access
codes/passwords, electronic storage and memory devices and instructional manuals, or other property
prepared by or for, or belonging to the Company, which is then in the Employee’s possession or
control.
1.2 Severance. If (a) the Employee’s employment is terminated by the Company without
Cause or by the Employee for Good Reason or (b) the Employee is not offered continuing employment
on substantially the same terms as set forth herein in connection with a Change of Control, then,
in either case, the Company shall pay to the Employee, as severance, an aggregate amount equal to:
(i) his then current base salary during the twelve-month period commencing on the effective date of
the termination of Employee’s employment relationship with the Company (the “Severance Period”) and
(ii) an amount equal to twelve times the monthly amount that the Company paid for the Employee’s
participation in the Company’s health insurance plan during the month immediately preceding the
Termination Date. All of the foregoing amounts shall be payable pro rata over the Severance Period
in accordance with the Company’s normal payroll practices. Additionally, any bonus amounts earned
as of the end of a fiscal year but not paid as of the Termination Date shall be paid to the
Employee in a manner consistent with payment of such bonus amounts to the Company’s other senior
management employees notwithstanding the subsequent termination of the Employment Period. All
benefits,
including health insurance benefits, offered by the Company shall cease as of the Termination Date
and the Employee may elect to continue his participation in the Company’s health insurance benefits
at the Employee’s expense pursuant to COBRA by notifying the Company in the time specified in the
COBRA notice to be delivered by the Company to the Employee as of the Termination Date and by the
Employee paying the monthly premium himself. Notwithstanding the foregoing, the Company shall not
make any payments pursuant to this Section 1.2 to the Employee unless and until (x) the Employee
executes and delivers to the Company a general release in substantially the form of Exhibit
A attached hereto (the “Release”), (y) such Release is executed and delivered to the Company
within twenty-one (21) days after the Termination Date and (z) all time periods for revoking such
Release have lapsed (the “Release Period”). Once the executed Release is delivered to the Company,
if any payments pursuant to this Section 1.2 had been deferred pending the receipt of such Release,
the first payment following such delivery shall be in an amount equal to the total amount to which
the Employee would otherwise have been entitled to during the period following the date of
termination if such deferral had not occurred; provided, however, that in the event that the
Release Period begins in one calendar year but ends in a subsequent calendar year, then the first
payment hereunder shall in no event be made prior to the first day of the subsequent calendar year.
1.3 Code Section 409A. If the Employee is a “specified employee” within the meaning
of Section 409A of the Internal Revenue Code of 1986 (as amended the “Code”), then any amounts
payable to the Employee under this Section 4 during the first six months and one day following the
date of termination that constitute nonqualified deferred compensation within the meaning of
Section 409A of the Code (as determined by the Company in its sole discretion) shall not be paid
until the date that is six months and one day following such termination to the extent necessary to
avoid adverse tax consequences under Section 409A of the Code, and, if such payments are required
to be so deferred, the first payment shall be in an amount equal to the total amount to which the
Employee would otherwise have been entitled to during the period following the date of termination
if such deferral had not been required. Furthermore, this Agreement is intended to comply with
Section 409A of the Code (or any regulations or rulings thereunder), and shall be construed and
interpreted in accordance with such intent. Notwithstanding anything to the contrary in this
Agreement, the Company, in the exercise of its sole discretion and without the consent of the
Employee, may amend or modify this Agreement in any manner in order to meet the requirements of
Section 409A of the Code as amplified by any Internal Revenue Service or U.S. Treasury Department
guidance. Any provision of this Agreement that would cause the payment of any benefit to fail to
satisfy Section 409A of the Code shall have no force and effect until amended to comply with
Section 409A of the Code (which amendment shall be retroactive to the extent permitted by the Code
or any regulations or rulings thereunder). Specifically but without limiting the foregoing, payment
under Section 1.2 shall be made only in the event that the termination of employment constitutes a
“separation from service” within the meaning of Section 409A(a)(2)(A)(i) of the Code and in the
event that the Company determines that a “separation from service” has not occurred, any payment
due hereunder shall be deferred until such time as a “separation from service” has occurred.
1.4 No Other Benefits. Except as otherwise expressly provided herein, the Employee
shall not be entitled to any other salary, bonuses, employee benefits or compensation
from the Company after the termination of the Employment Period and all of the Employee’s rights to
salary, bonuses, employee benefits and other compensation hereunder which would have accrued or
become payable after the Termination Date shall cease and be forfeited upon such termination or
expiration of the Employment Period, other than those expressly required under applicable law (such
as COBRA).
1.5 Right of Offset. The Company may offset any bona fide obligations that the
Employee owes the Company against any amounts the Company owes the Employee hereunder;
provided that, notwithstanding the foregoing or any other provision of this
Agreement to the contrary, in no event shall any payment under this Agreement that constitutes
“deferred compensation” for purposes of Section 409A of the Code be subject to offset, counterclaim
or recoupment by any other amount unless otherwise permitted by Section 409A of the Code.
1.6 Definitions. The following definitions shall apply with respect to this Section 1:
A. Cause. “Cause” shall mean (a) willful misconduct in connection with the Employee’s
employment with the Company or his willful failure to perform his responsibilities in the best
interest of the Company, as determined by the Board, (b) conviction of, or a pleading of guilty or
nolo contendre to, a felony other than an act involving a traffic related infraction, (c) any act
of fraud, theft, embezzlement or other material dishonesty by the Employee which harmed the
Company, or (d) intentional violation of a federal or state law or regulation applicable to the
Company’s business which was or is reasonably likely to be injurious to the Company, or (e)
repeated failure by the Employee to perform his duties and obligations of his position with the
Company which failure is not cured within 30 days after notice of such failure from the Board to
the Employee.
B. Disability. “Disability” shall mean any physical or mental injury, illness or
incapacity which results in the Employee being unable to effectively perform the essential
functions of his duties for a continuous period of more than 90 days or 120 days (whether or not
continuous) in any 180 day period, as determined by an independent, legally qualified medical
doctor selected by the Company’s health or disability insurer.
C. Good Reason. For purposes of this Agreement, “Good Reason” shall mean (a) a
material reduction in annual base salary or job responsibility for the Employee without his consent
or (b) the relocation of the Employee’s principal office location to a facility or location that is
more than 50 miles away from Boston without the Employee’s consent.
2. Confidentiality and Non-Compete
The Employee acknowledges and agrees that he remains bound by and subject to the terms and
conditions set forth in that certain (a) Confidentiality Agreement by and between the Company and
the Employee dated December 8, 2005 and (b) Non-Competition Agreement by and between the Company
and the Employee dated December 8, 2005.
3. Notices
All notices under this Agreement must be in writing and shall be addressed as follows:
If to the Company:
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Carbonite, Inc. 000 Xxxxxxxxxx Xxxxxx, 00xx xxxxx Xxxxxx, XX 00000 Attention: General Counsel |
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with a copy to:
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Xxxxx X. Pravda, Esq. Xxxxx & Lardner LLP 000 Xxxxxxxxxx Xxxxxx Xxxxxx, XX 00000 |
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If to the Employee:
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To the address set forth below the signature of the Employee; |
Any notice, request or demand, document, consent or other communication to be given, sent or
furnished by any party to any other party shall be in writing and personally delivered or sent by
regular U.S. certified mail, U.S. Express Mail, telecopy or Federal Express (or similar type of
overnight delivery). Notice shall be deemed received when (i) hand delivered; (ii) after receipt
of confirmation or answer back if sent by telecopy; (iii) three business days after deposited in
the U.S. mails, postage prepaid, for certified mail; or (iv) one business day after deposited in a
United States Post Office box for Express Mail, postage prepaid, or delivered to Federal Express
(or similar type of overnight delivery), properly addressed to the applicable party; in all cases
notices should be given at the addresses stated above, or to such other addresses as a party may
from time to time designate to the other in accordance with this Section 3.
4. Miscellaneous
4.1 Modification. This Agreement constitutes the entire Agreement between the parties
with regard to the subject matter hereof, superseding all prior understandings and agreements,
whether written or oral. This Agreement may not be amended or revised except by a writing signed
by the parties.
4.2 Successors and Assigns. This Agreement and the exhibits attached hereto are each
binding upon and inure to the benefit of both parties and their respective successors and assigns,
including any corporation with which or into which the Company may be merged or which may succeed
to its assets or business, although the obligations of the Employee are personal and may be
performed only by him.
4.3 Governing Law. This Agreement is to be construed under and governed by the laws
of the Commonwealth of Massachusetts.
IN WITNESS WHEREOF, the parties have executed this Severance Agreement as of the date and year
first above written.
| CARBONITE, INC. |
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| By: | /s/ Xxxxxx Xxxxxx | |||
| Name: | Xxxxxx Xxxxxx | |||
| Title: | Chief Financial Officer | |||
| EMPLOYEE: |
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| /s/ Xxxxx Xxxxxx | ||||
| Xxxxx Xxxxxx | ||||
Address: |
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WAIVER OF CLAIMS AND GENERAL RELEASE
This Waiver of Claims and General Release (the “Release”) is to confirm that Xxxxx Xxxxxx’x
at-will employment with Carbonite, Inc. (the “Company”) is terminated effective as of_______, 201_
(the “Termination Date”). Effective as of the Termination Date, by execution of this Release,
Xxxxx Xxxxxx (“you”) hereby resign from all offices you hold with the Company and any of its
subsidiaries.
Please read this Release carefully. To help you understand the Release and your rights as a
terminated employee, consult with your attorney.
Consistent with the provisions of that certain Severance Agreement by and between you and the
Company dated as of ________, 2011 (the “Severance Agreement”), the Company will provide you with
severance pay pursuant to the terms of the Severance Agreement. In consideration for the severance
payments and other good and valuable consideration set forth in the Severance Agreement, you hereby
agree as follows:
1. Release. You hereby release and forever discharge the Company and each of its past and
present officers, directors, employees, agents, advisors, consultants, successors and assigns from
any and all claims and liabilities of any nature by you including, but not limited to, all actions,
causes of actions, suits, debts, sums of money, attorneys’ fees, costs, accounts, covenants,
controversies, agreements, promises, damages, claims, grievances, arbitrations, and demands
whatsoever, known or unknown, at law or in equity, by contract (express or implied), tort, pursuant
to statute, or otherwise, that you now have, ever have had or will ever have based on, by reason
of, or arising out of, any event, occurrence, action, inaction, transition or thing of any kind or
nature occurring prior to or on the effective date of this Release. Without limiting the
generality of the above, you specifically release and discharge any and all claims and causes of
action arising, directly or indirectly, from your employment at the Company, arising under the
Employee Retirement Income Security Act of 1974 (except as to claims pertaining to vested benefits
under employee benefit plan(s) of the Company), Title VII of the Civil Rights Act of 1964, the Age
Discrimination in Employment Act of 1967, the Equal Pay Act, the Rehabilitation Act, the Americans
With Disabilities Act, Chapter 151B of the Massachusetts General Laws, Chapter 149 of the
Massachusetts General Laws, the Massachusetts Civil Rights Act and the Massachusetts Equal Rights
Laws and all applicable amendments, or any other law, statute, ordinance, rule, regulation,
decision or order pertaining to employment or pertaining to discrimination on the basis of age,
alienage, race, color, creed, gender, national origin, religion, physical or mental disability,
marital status, citizenship, sexual orientation or non-work activities. Payment of any amounts and
the provision of any benefits provided for in this Release do not signify any admission of
wrongdoing by the Company or any of its affiliates.
The foregoing shall not restrict you from instituting any proceeding to enforce the Company’s
obligations to you under this Release or to challenge the validity, or the knowing and voluntary
nature, of this Release.
2. Older Workers Benefit Protection Act. Pursuant to the Older Workers Benefit Protection
Act, the Company hereby advises you that you should consult an attorney before signing this
Release, that you are entitled to take up to twenty-one (21) days from the date of your receipt of
this Release to consider it and that you may have seven (7) days from the date you sign this
Release to revoke it. The revocation must be personally delivered to the Company’s Human Resource
Manager or his/her designee, or mailed to them via certified mail, return receipt requested and
postmarked within seven (7) calendar days of your execution of this Release. This Release shall
not become effective or enforceable until the revocation period has expired. Nothing herein is
intended to, or shall, preclude you from filing a charge with any appropriate federal, state, or
local government agency and/or cooperating with said agency in any
investigation. You, however, explicitly waive any right to file a personal lawsuit and/or receive
monetary damages that the agency may recover against each of the parties released in Paragraph 1
above, without regard as to who brought any said complaint or charge.
3. Confidentiality of this Release. You agree that you shall keep the terms of this
Release strictly confidential and not disclose, directly or indirectly, any information concerning
them to any third party, with the exception of your spouse (if you have a spouse), financial or
legal advisors, provided that they agree to keep such information confidential as set forth herein
and not disclose it to others, and except as may be required by court order or legal process.
4. Breach. You agree that all of the payments and benefits provided for in the Severance
Agreement are subject to termination, reduction or cancellation in the event of your material
breach of this Release.
5. Enforcement. The parties agree that any legal proceeding brought to enforce the
provisions of this Release may be brought only in the courts of the Commonwealth of Massachusetts
or the federal courts located in Massachusetts and each party hereby consents to the jurisdiction
of such courts.
6. Severability. If any of the terms of this Release shall be held to be invalid and
unenforceable and cannot be rewritten or interpreted by the court to be valid, enforceable and to
meet the intent of the parties expressed herein, then the remaining terms of this Release are
severable and shall not be affected thereby.
7. Miscellaneous. This Release and the Severance Agreement constitutes the entire
agreement between the parties about or relating to your termination of employment with the Company,
or the Company’s obligations to you with respect to your termination and fully supersedes any and
all prior agreements or understandings between the parties.
8. Representations. You affirm that the only consideration for signing this Release is
described in the Severance Agreement as referenced herein and that no other promises or agreements
of any kind have been made to or with you by any person or entity whatsoever to cause you to sign
this Release, and that you fully understand the meaning and intent of this instrument. You agree
that at all times during your employment you were properly compensated for all hours you worked and
that you suffered no work related accident, illness or injury. You agree that you will not
disparage the Company in any way, nor will you make any public comments or communications which
tend to cast the Company, its owners, directors, officers or employees in a negative light.
You acknowledge that you have carefully read this Release, voluntarily agree to all of its
terms and conditions, understand its contents and the final and binding effect of this Release, and
that you have signed the same as your own free act with the full intent of releasing the Company
from all claims you may have against it.
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| NAME OF EMPLOYEE | CARBONITE, INC. | |||||||
| By: | ||||||||
Xxxxx Xxxxxx
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Name: | |||||||
| Title: | ||||||||
| Date Signed: | Date Signed: | |||||||
| By Above Party | By Above Party | |||||||
