EXHIBIT 10.10
PROGINET CORPORATION
MANAGEMENT CONTINUITY AGREEMENT
AGREEMENT dated May 28, 2003, by and between Xxxxxx Xxxxx (the "Executive") and
Proginet Corporation (the "Company"), a Delaware corporation having its
principal office at 000 Xxxxxx Xxxx Xxxxx, Xxxxxx Xxxx, XX 00000.
WHEREAS, the Executive is Chief Technology Officer of the Company; and
WHEREAS, the Company recognizes that in order to induce the Executive to remain
in the employ of the Company, to reinforce his/her motivation to increase the
value of the Company for its shareholders, and to strengthen his/her objectivity
during any period when a Change of Control (as defined in paragraph 5(a) below)
of the Company is contemplated or could occur, it must provide the Executive
with security against the possibility that his/her employment could be
terminated as a result of a Change in Control;
NOW, THEREFORE, the parties hereby agree, for the mutual considerations stated
below, as follows:
1. The term of this Agreement (the "Term") shall begin on the date hereof and
shall end on the third anniversary of the date hereof; provided that (i)
the Term shall be automatically extended by one year as of the end of the
initial term or each year in the Term unless either party shall have given
the other at least thirty days' written notice of a desire not to extend,
(ii) if at any time before a Change of Control the Board of Directors of
the Company (the "Board") gives the Executive written notice (x) that it
has determined that he/she has willfully refused to perform his/her duties
as Executive of the Company, and (y) setting forth in detail the conduct
upon which such determination is based, and the Executive fails to correct
such willful refusal to the satisfaction of the Board within 60 days
following his/her receipt of such notice, then the Board may terminate
this Agreement by written notice to the Executive, and (iii) the Term
shall in all events end upon the voluntary retirement of the Executive.
2. If following a Change of Control (as defined in paragraph 5(a) below), the
Company terminates the Executive without Cause (as defined in paragraph
5(b) below) or the Executive terminates his/her own employment for Good
Reason (as defined in paragraph 5(c) below), the Executive shall be
entitled to receive:
(i) A lump sum payment representing the then present value (computed
using the interest rate assumption set forth in paragraph 5(d)
below) of the sum of (a) the aggregate amount of base compensation
that he/she would have received for the period of six (6) months
following the termination, assuming that his/her base compensation
for that period was paid at the highest annual rate in effect at any
time during the period of three years immediately preceding the
termination, plus (b) the amount of annual bonuses that he/she would
have received with respect to a partial calendar year in the period
of six months following the termination , assuming the amount of
such bonuses for each partial calendar year in such period would
have equaled a pro rata
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portion of, the highest aggregate amount of such bonuses that he/she
received for any one of the three calendar years preceding the
termination;
(ii) Continuation at Company expense for the period of six (6) months
following the termination, of his/her participation in all
retirement, medical, life insurance, disability, and other benefit
plans and programs of the Company in which he/she was entitled to
participate before the termination (or, in the case of any such plan
or program the terms of which do not permit such continued
participation, equivalent benefits outside such plan or program);
and
(iii) Executive job placement counseling at Company expense, provided,
however, that the job placement counseling firm selected by the
Executive shall be reasonably satisfactory to the Company. Such
benefit is limited to one year.
3. (a) If following a Change of Control (as defined in paragraph 5(a) below),
the Company terminates the Executive with Cause (as defined in paragraph
5(b) below), the Executive shall not be entitled to receive any benefits
as set forth in paragraphs 2(i-iii) above.
(b) If following a Change of Control (as defined in paragraph 5(a) below),
the Executive terminates his/her own employment without Good Reason (as
defined in paragraph 5 (c) below), the Executive shall be entitled to
receive three (3) month's compensation and all benefits as set forth in
paragraphs 2(i-ii) above and Executive job placement counseling as set
forth in paragraph 2(iii) above.
4. The Company shall pay all costs incurred by the Executive in enforcing the
provisions of this Agreement, including reasonable legal fees and
expenses.
5. (a) A "Change of Control" shall be deemed to have occurred if (i) there is
a public offering or offerings of securities aggregating more than 75
percent of the total combined voting power of the Company's then
outstanding securities; (ii) any "person" (as such term is used in
Sections 13(d) and 14(d) of the Securities Exchange Act of 1934, as
amended (the "Act") , other than a trustee or other fiduciary holding
securities under an employee benefit plan of the Company or its
subsidiaries, is or becomes the "beneficial owner" (as defined in Rule
13d-3 of the Act), directly or indirectly, of securities of the Company
representing more than 20 percent of the total combined voting power of
the Company's then outstanding securities, (iii) there occurs a change of
control of the Company of a nature that would be required to be reported
in response to Item 1(a) of the Current Report on Form 8-K pursuant to
Section 13 or 15(d) of the Securities Exchange Act of 1934 (the "Exchange
Act") or in any other filing under the Exchange Act; or (iv) during any
period of twelve consecutive months (not including any period prior to the
execution of this Agreement), individuals who at the beginning of such
period constitute the Board or who represent institutions that were
represented on the Board at the beginning of such period (the "Original
Board"), and any new director (other than a director designated by a
person who has entered into an agreement with the Company to effect a
transaction described in item (ii) or (v) whose election by the Board or
nomination for election by the Company's stockholders was approved by a
vote of at least two-thirds (b) of the directors then still in office who
either were members of the Original Board or whose election or nomination
for election was previously so approved, cease for any reason to
constitute a majority of the Board; or (vi) the stockholders of the
Company approve a merger or consolidation of the Company with any other
corporation, other than a merger or consolidation which would result in
the voting securities of the Company outstanding immediately prior thereto
continuing to represent (either by remaining outstanding or by being
converted into voting securities of the surviving entity) at least 80
percent of the
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combined voting power of the voting securities of the Company or such
surviving entity outstanding immediately after such merger or
consolidation, or the stockholders of the Company approve a plan of
complete liquidation of the Company or an agreement for the sale or
disposition by the Company of all or substantially all the Company's
assets.
(b) The Company shall not have "Cause" to terminate the Executive
employment for any reason except as specified for "Cause" herein. The
Company shall have "Cause" to terminate the Executive's employment if a
majority of the entire Board determines, after a hearing at which the
Executive has the opportunity to be heard, that the Executive has
committed (i) an act of gross negligence or willful misconduct which has
caused material damage to the Company or its business, (ii) a felony
involving money or other property (iii) a crime of moral turpitude, or
(iv) embezzlement or other criminal fraud.
(c) The Executive shall have "Good Reason" to terminate his/her employment
if (i) his/her duties or reporting responsibilities are materially
changed, (ii) his/her base compensation is reduced or his/her performance
plan is altered in any material way, (iii) the terms of the Company's
annual and long-term incentive plans and programs are materially changed,
(iv) the office where he/she is primarily expected to perform his/her
duties is relocated outside of New York metropolitan area, or (v) he/she
otherwise suffers a material adverse change in the terms and conditions of
his/her employment.
(d) For purposes of this Agreement, present value shall be determined using
an interest rate equal to that as of the date of the termination of
employment.
6. Nothing contained herein shall be construed as conferring on the Executive
any right to continued employment by the Company before the occurrence of
a Change of Control.
7. This Agreement shall be governed by the laws of the State of New York,
without reference to the rules of conflicts of law.
Agreed: Agreed:
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Xxxxxx Xxxxx, Chief Technology Officer Xxxxx X. Xxxxx, President & CEO
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