This Transition Agreement involves
Title: TRANSITION SERVICES AGREEMENT
Governing Law: California Date: 8/3/2016
Industry: Computer Peripherals Sector: Technology
TRANSITION SERVICES AGREEMENT
This Transition Services Agreement (“Agreement”) is made by and between David Faugno (“Executive”) and Barracuda Networks, Inc. (the “Company”) (collectively referred to as the “Parties” or individually referred to as a “Party”).
WHEREAS, Executive intends to end his employment with the Company no later than September 1, 2016 (Executive’s actual termination date, the “Termination Date”); and
WHEREAS, Executive and the Company both wish to ensure an orderly transition of Executive’s duties and responsibilities throughout the Transition Period (as defined below);
NOW, THEREFORE, in consideration of the mutual promises made herein, the Company and Executive hereby agree as follows:
1. Consideration .
a. Executive’s Termination of Employment . Executive will end his employment with the Company as of the Termination Date, and the Company shall process his voluntary termination accordingly. Executive agrees to execute any documentation deemed reasonably necessary by the Company to confirm Executive’s resignation from employment with the Company and as an officer of the Company and its subsidiaries.
b. Continued Employment; Transition Services . The Company agrees to continue to employ Executive until the Termination Date. During the period in which Executive is an employee, Executive will continue to receive his compensation and benefits in accordance with the terms currently in effect. Beginning on the Termination Date and continuing through November 1, 2017 (such date, the “Expected Termination Date”) or such earlier date that Executive’s services are terminated in accordance with the last sentence of this paragraph (the period in which Executive is providing transition services, the “Transition Period”), Executive agrees to (1) provide reasonable transition services as a consultant to the Company, as the Company may request, including, but not limited to, the transitioning of Executive’s responsibilities to the new Chief Financial Officer of the Company, and (2) assisting Company with strategic projects. Executive agrees to continue to provide such consulting services to the Company in good faith, to the best of his ability and in the best interests of the Company. Notwithstanding anything in this Agreement to the contrary, Executive’s services to the Company remain at-will, and either the Company or Executive are free to terminate Executive’s services to the Company with or without Cause or notice at any time. However, as described in Section 1(c), Employee may be entitled to severance benefits depending on the circumstances of Employee’s termination of services with the Company.
c. Equity Awards and Equity Acceleration Upon Qualifying Termination . Executive will continue to vest in Executive’s outstanding Company stock options and restricted stock unit awards (collectively, the “Equity Awards”) in accordance with their terms through the Transition Period. Should Executive have a Qualifying Termination (as defined below) before the Expected Termination Date, then the vesting of Executive’s then-outstanding Equity Awards will accelerate such that Executive will vest in the number of shares of Company common stock subject to each such Equity Award that would have vested had Executive continued to provide services to the Company through Expected Termination Date. Any Equity Awards that vest pursuant to the prior sentence will become exercisable or settled, as applicable, as of the Qualifying Termination and will be settled, subject to any delay required under Section 4 of this Agreement. Any portion of Executive’s Equity Awards that otherwise would not become eligible to vest during the Transition Period immediately will be forfeited as of the Termination Date and the underlying shares returned to the Company. Except as otherwise set forth in this Agreement, the Equity Awards shall continue to be governed by the terms and conditions of the applicable award agreement and the Company’s equity plan under which the award was granted.
d. Payment of Bonus . Executive will be entitled to receive 50% of his target bonus opportunity for the 2017 fiscal year (ending February 28, 2017). The bonus will be paid, less any applicable withholding, within fifteen (15) days of the Termination Date.
e. Definition of Qualifying Termination . A Qualifying Termination shall occur if prior to the Expected Termination Date, Executive’s service to the Company is terminated by the Company other than for Cause (as defined below).
f. Definition of Cause . For purposes of this Agreement, Cause shall mean (i) an act of personal dishonesty taken by the Executive in connection with his responsibilities as a consultant and intended to result in substantial personal enrichment of the Executive, (ii) Executive being convicted of a felony, (iii) a willful act by the Executive, which act constitutes gross misconduct and which is injurious to the Company, (iv) following delivery to the Executive of a written demand for performance from the Company which describes the basis for the Company’s reasonable belief that the Executive has not substantially performed his duties, continued violations by the Executive of the Executive’s obligations to the Company that are demonstrably willful and deliberate on the Executive’s part.
2. Impact on Other Arrangements . Executive understands and agrees that except as expressly provided for in this Agreement, Executive shall not be entitled to any other consideration or separation benefits, including, but not limited to, any severance payments, equity benefits, or other severance benefits provided for in the offer letter between Executive and the Company dated June 30, 2012 (the “Offer Letter”).
3. Release of Claims.
In exchange for the Consideration provided under this Agreement, Executive agrees to release any and all claims arising against the Company or any of its respective directors, officers, or current and former employees as of the date of the execution of this Agreement (collectively the “Releasees”) including, but not limited to, the following: (a) claims arising under the federal or any state constitution; (b) claims arising under the federal or any state statute, including the Age Discrimination in Employment Act of 1967 and the Older Workers Benefit Protection Act; (c) claims arising under federal, state or local laws prohibiting discrimination in employment; (d) claims for wrongful termination, breach of contract, breach of public policy, physical or mental harm or distress; (e) any claim for attorneys’ fees and costs; (f) any and all claims relating to, or arising from, Executive’s right to purchase, or actual purchase of shares of stock of the Company; (g) any unknown claims which, if known by the releaser at the time of the release must have materially affected Executive’s settlement with the Company, as provided for by California Civil Code Section 1542; and (h) any and all other claims arising from Executive’s employment relationship with the Company or the termination of that relationship. Executive agrees that he will not file any legal action asserting any such claims. Executive agrees that the release set forth in this section shall be and remain in effect in all respects as a complete general release as to the matters released. This release does not extend to: (i) any obligations incurred under this Agreement; or (ii) claims that cannot be released as a matter of law.
4. Tax Consequences .
a. General . The Company makes no representations or warranties with respect to the tax consequences of the payments provided to Executive or made on his behalf under the terms of this Agreement. Executive agrees and understands that he is responsible for payment, if any, of personal local, personal state, and/or personal federal taxes on the payments and any other consideration provided hereunder by the Company and any penalties or assessments thereon. Executive further agrees to indemnify and hold the Company harmless from any claims, demands, deficiencies, penalties, interest, assessments, executions, judgments, or recoveries by any government agency against the Company for any amounts claimed due on account of (a) Executive’s failure to pay or Executive’s delayed payment of Executive’s personal federal or personal state taxes, or (b) damages sustained by the Company by reason of any claims, specifically set forth in (a) above, including attorneys’ fees and costs.
b. Each payment and benefit payable under this Agreement is intended to constitute a separate payment for purposes of Treasury Regulation Section 1.409A-2(b)(2)(iii). Payments under this Agreement are intended to either be exempt from or comply with the requirements of Section 409A of the Code and the final treasury regulations (the “Treasury Regulations”) and official guidance thereunder (collectively, as each may be amended from time to time, “Section 409A”) so that none of the severance payments and benefits to be provided hereunder will be subject to any additional tax imposed under Section 409A, and any ambiguities or ambiguous term