EXHIBIT 10.15
EXHIBIT C TO EMPLOYMENT AGREEMENT
SEVERANCE AGREEMENT
This AGREEMENT is entered into between StorageNetworks, Inc. (the
"Company") and Xxxx Xxxxxx ("Executive") effective as of the 9th day of July,
1999.
WHEREAS, the parties desire to memorialize their understanding regarding
certain payments and benefits that may be paid to Executive in the event his
employment with the Company is terminated under certain circumstances.
In consideration of the Executive's employment with the Company, the
parties agree as follows:
1. Term. The term of this Agreement (the "Term") shall be from the date
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hereof through the fourth anniversary of such date; provided, however, that if
the Executive is terminated without Cause (as defined below) by the Company or
if the Executive resigns for Good Reason (as defined below) during the Term,
this Agreement will remain in effect until all obligations of the Company
hereunder have been discharged.
2. Termination of Employment; Severance Benefits.
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2.1. Terminability of Employment. Either the Company or Executive may at
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any time terminate Executive's employment with the Company by written
notice to the other party. However, if Executive's employment terminates
during the Term of the Agreement for any of the reasons described in this
Section 2, the parties will be required to discharge the applicable
obligations described in this Section 2. If Executive's employment
terminates at any time other than during the Term of the Agreement or for
any other reason not described in this Section 2, Executive will have no
rights under the Agreement, other than for any compensation earned and
unpaid at the date of termination and compensation for accrued but unused
vacation, and any entitlements under any benefit plans.
2.2. Termination by the Company for Cause or by Executive Without Good
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Reason. If the Company terminates Executive's employment for Cause (as
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defined in this Section 2.2) or if Executive terminates his employment
other than for Good Reason (as defined in this Section 2.2), the Company
will have no further obligation or liability to Executive hereunder other
than for any compensation earned and unpaid at the date of termination and
compensation for accrued but unused vacation and any entitlements under any
benefit plans, and the Term of the Agreement will end when those amounts
are paid.
"Cause" means (a) Executive's conviction in a court of law of any crime or
offense, which conviction makes him unfit for continuing employment,
prevents him from effective management of the Company, or materially
adversely affects the reputation or business activities of the Company, (b)
dishonesty or willful misconduct that adversely affects the
reputation or business activities of the Company, including specifically
and without limitation misappropriation of funds or Company property, (c)
any material violation of any noncompetition or nondisclosure agreement
between the Company and the Executive, or (d) Executive's continuing
failure or refusal to perform his duties as an employee of the Company or
to carry out the in all material respects the lawful directives of the
Company, after thirty (30) days written notice of such failure or refusal
provided to Executive by Company.
"Good Reason" means (a) relocation of Executive's principal place of work
for the Company to a location more than 50 miles from its location
immediately prior to such relocation and (b) failure of the Board of
Directors to grant the incentive stock options contemplated by Exhibits A
and D to the Employment Agreement.
2.3. By the Company Without Cause or By Executive for Good Reason.
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Entitlement to Severance Benefits. If, during the Term of the Agreement,
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the Company terminates Executive's employment without Cause, or if
Executive terminates his employment for Good Reason, the Company will,
provide severance benefits to Executive as set forth below in this Section
2.3:
(i) If such termination occurs prior to the first anniversary of the
date hereof, (1) the Company will make severance payments to the
Executive equal to twelve (12) months salary, at the Executive's then
current base salary, such payments to be made in conformity with the
Company's then prevailing compensation practices, (2) the Company will
provide six (6) months of continued medical and dental coverage on the
same terms and conditions in effect immediately prior to such
termination, and (iii) ten percent (10%) of any unvested portion of
the stock option granted to the Executive as of the date hereof shall
accelerate and become immediately exercisable as of the date of
termination; or
(ii) If such termination occurs on or after the first anniversary of
the date hereof but prior to the second anniversary of the date
hereof, (1) the Company will make severance payments to the Executive
equal to nine (9) months salary, at the Executive's then current base
salary, such payments to be made in conformity with the Company's then
prevailing compensation practices, (2) the Company will provide four
and one-half (4.5) months of continued medical and dental coverage on
the same terms and conditions in effect immediately prior to such
termination, and (iii) seven and one-half percent (7.5%) of any
unvested portion of the stock option granted to the Executive as of
the date hereof shall accelerate and become immediately exercisable as
of the date of termination; or
(iii) If such termination occurs on or after the second anniversary of
the date hereof but prior to the third anniversary of the date hereof,
(1) the Company will make severance payments to the Executive equal to
six (6) months salary, at the Executive's then current base salary,
such payments to be made in conformity with
the Company's then prevailing compensation practices, (2) the Company
will provide three (3) months of continued medical and dental coverage
on the same terms and conditions in effect immediately prior to such
termination, and (iii) five percent (5%) of any unvested portion of
the stock option granted to the Executive as of the date hereof shall
accelerate and become immediately exercisable as of the date of
termination; or
(iv) If such termination occurs on or after the third anniversary of
the date hereof but prior to the fourth anniversary of the date
hereof, (1) the Company will make severance payments to the Executive
equal to three (3) months salary, at the Executive's then current base
salary, such payments to be made in conformity with the Company's then
prevailing compensation practices, (2) the Company will provide one
and one-half (1.5) months of continued medical and dental coverage on
the same terms and conditions in effect immediately prior to such
termination, and (iii) two and one-half percent (2.5%) of any unvested
portion of the stock option granted to the Executive as of the date
hereof shall accelerate and become immediately exercisable as of the
date of termination;
provided, however, that if the Executive's employment is terminated without
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Cause during the Term of this Agreement and Xxxxx Xxxx is, within 90 days
before or after the effective date of such termination, no longer the Chief
Executive Officer of the Company, (i) the severance payments payable to the
Executive shall, regardless of and not in addition to the foregoing, be
equal to twelve (12) months salary, at the Executive's then current base
salary, such payments to be made in conformity with the Company's then
prevailing compensation practices, (ii) the Company will provide six (6)
months of continued medical and dental coverage on the same terms and
conditions in effect immediately prior to such termination, and (iii) the
maximum stock option acceleration in 2.3(i)-(iv) above will also apply. The
accelerated vesting of stock options contained in this Agreement are in
addition to those contained in the Amendment to Stock Option Agreement,
Exhibit D, Rider A.
3. Withholding. All payments required to be made by the Company to
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Executive under this Agreement will be subject to the withholding of such
amounts, if any, relating to tax and other payroll deductions as may be required
by law.
4. Arbitration. Any dispute or controversy between the parties involving
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the construction or application of any terms, covenants or conditions of this
Agreement, or any claim arising out of or relating to this Agreement that is not
resolved within ten days by the parties will be settled by arbitration in
Boston, Massachusetts, in accordance with the National Employment Dispute
Resolution Rules of the American Arbitration Association then in effect, and
judgment upon the award rendered by the arbitrator(s) may be entered in any
court having jurisdiction thereof. Any decision of the arbitrator(s) will be
final and binding upon the parties. The parties agree and understand that they
hereby waive their rights to a jury trial of any dispute or controversy relating
to the matters specified above in this Section 4.
5. Employment. Other than as set forth herein, Executive shall not be
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entitled to any other salary continuation, severance, right to notice or other
termination benefits in the event of his cessation of employment with the
Company.
6. Amendment or Modification; Waiver. This Agreement may not be amended
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unless agreed to in writing by Executive and the Company. No waiver by either
party of any breach of this Agreement will be deemed a waiver of a subsequent
breach.
7. Severability. In the event that any provision of this Agreement is
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determined to be invalid or unenforceable, the remaining provisions shall remain
in full force and effect to the fullest extent permitted by law.
8. Controlling Law. This Agreement will be controlled and interpreted
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pursuant to Massachusetts law.
9. Notices. Any notices required or permitted to be sent under this
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Agreement are to be delivered by hand or mailed by registered or certified mail,
return receipt requested, and addressed as follows:
If to the Company:
StorageNetworks Inc.
000 Xxxxx Xxx.
Xxxxxxx, XX 00000
If to Executive:
Xxxx Xxxxxx
0 Xxxxxxx Xxxxxx
Xxxxxxx, XX. 00000
Either party may change its address for receiving notices by giving notice to
the other party.
In witness whereof, the parties hereto have executed this Agreement as of
the date first set forth above.
/s/ Xxxx Xxxxxx
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Xxxx Xxxxxx
STORAGENETWORKS, INC.
By: /s/ Xxxxxxx X. Xxxxx
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Title: Dir of H.R.
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AMENDMENT NO. 1 TO SEVERANCE AGREEMENT
This Amendment No. 1 to Severance Agreement is entered into between
StorageNetworks, Inc. (the "Company") and Xxxx X. Xxxxxx ("Executive") as of the
26/th/ day of August 1999.
WHEREAS, the Company and the Executive are parties to a Severance Agreement
dated as of July 19, 1999 (the "Agreement"); and
WHEREAS, the Company and the Executive desire to amend the Agreement as
provided herein.
The Company and the Executive hereby agree as follows:
1. The last sentence of the last paragraph of Section 2.3 of the
Agreement is hereby deleted and replaced in its entirety with the following:
"The accelerated vesting of stock options contained in this Agreement are in
addition to those contained in Section 2 of the Incentive Stock Option Agreement
between the Company and the Executive dated as of August 4, 1999 (Exhibit D to
the Employment Agreement)."
2. Except as amended hereby, the Severance Agreement shall remain in full
force and effect in accordance with its terms.
IN WITNESS WHEREOF, the Company and the Executive have executed this
Amendment No. 1 to Severance Agreement as of the date set forth above.
STORAGENETWORKS, INC. EXECUTIVE
By: /s/ Xxxx X. Xxxxxxxx /s/ Xxxx X. Xxxxxx
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Chief Financial Officer Xxxx X. Xxxxxx
