EXHIBIT 10.7
PROGINET CORPORATION
MANAGEMENT CONTINUITY AGREEMENT
AGREEMENT dated __________________, by and between _________________ (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 _________________________________________ 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 motivation to increase the value
of the Company for its shareholders, and to strengthen his 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 employment could be terminated as a
result of a Change of 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 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 has willfully refused to perform his
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 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 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 would have received for the
period of eighteen months following the termination (or, if
shorter, the period beginning on the day following the date of
the termination and ending on the date he reaches age 65),
assuming that his 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 would have
received with respect to each calendar year and partial
calendar year in the period of eighteen months following the
termination (or, if shorter, the period beginning on the day
following the date of the termination and ending on the date
he reaches age 65), assuming that the amount of such bonuses
for each complete calendar year in such period would have
equalled, and the amount of such bonuses for each partial
calendar year in such period would have equalled a pro rata
portion of, the highest aggregate amount of such bonuses that
he received for any one of the three calendar years preceding
the termination;
(ii) Continuation at Company expense for the period of eighteen
months following the termination (or, if shorter, the period
beginning on the day following the date of the termination and
ending on the date he reaches age 65), of his participation in
all retirement, medical, life insurance, disability, and other
benefit plans and programs of the Company in which he 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 benefits are limited to one year.
3. 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) or the Executive terminates his own employment
without Good Reason (as defined in paragraph 5(c) below), the Executive
shall be entitled to received six month's compensation and all benefits
as set forth in paragraph 2(ii) above and Executive job placement
counselling 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 Xxxxxx X. Xxxxx, 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
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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 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 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 employment
if (i) his duties or reporting responsibilities are materially changed,
(ii) his base compensation is reduced or his performance compensation
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 is primarily expected to perform his
duties is relocated outside the New York metropolitan area, or (v) he
otherwise suffers a material adverse change in the terms and conditions
of his 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.
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Agreed: Agreed:
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Executive For Board of Directors
